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October 20, 2020
Question

Best way to pay an employee who also cleans business.

  • October 20, 2020
  • 1 reply
  • 0 views

I have an w-2 employee that we also pay additional pay for cleaning the business weekly. Up to this point we have been adding the pay as a "Bonus" on her regular paycheck. However for tracking purposes I would like to better label what that money is going towards. Any suggestions on the best way to do this? Should I pay her like a 1099 Contractor or do an Employee Reimbursement? 

1 reply

Rebecca R
October 20, 2020

Hello BCClementine,

 

QuickBooks Online Payroll makes the process of running payroll for your employees straightforward. I'm happy to hear that you've been using our Payroll add-on and I want to help you find the best way to pay your employee for the additional cleaning work she's doing for your business. 

 

There are several different additional pay types that you might consider in compensating your employee for the cleaning work being done. As you mentioned, a Reimbursement is an option, but reimbursements are typically used to repay business-related expenses and are nontaxable. To record a taxable payment to your employee that is separate from their regular wages, the Other Earnings pay type is what I suggest.

 

To add Other Earnings to your employee's pay, please follow the steps below:

 

  1. From the Payroll tab in the left menu, choose the Employees page.
  2. Select the employee that you would like to add the additional pay type for.
  3. Find Step 4 and select the Edit pencil next to Additional pay types.
  4. Under You can also pay... select Other Earnings.
  5. Use the Edit pencil to change the name to represent the purpose of the pay. In this case you could name it "Cleaning Compensation" if you like.
  6. If you always pay your employee the same amount for this pay type, enter a Recurring amount. You can always enter or edit this amount while running payroll if need be.
  7. Click Done to save your changes.

 

The next time you run payroll you'll notice a new column for Other Earnings under the title you have given it. If you've entered a recurring amount you should see it pre-filled, but you can click the field to edit or erase the amount if necessary. For a breakdown of this and other pay types and deductions, the article below will be a great resource:

 

 

Please let me know if you have additional questions. I'm here to help!