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Company paid trip as Employee bonus

So, back in June 2018, our company paid for several employees to go on a mini vacation as a bonus.  We did this 2 years ago also...however, back then our accountant had us create a G/L expense account to enter the airfare/hotel costs as an "Employee Welfare" business expense.  Now they're saying it is a taxable bonus to our employees and to put the cost of each employee's W-2 for 2018.  How do I do that?  Luckily, I haven't printed out my W-2's yet.  And will this affect my other payroll tax reports?

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QuickBooks Team

Re: Company paid trip as Employee bonus

Good day, Amy46,

 

I can help you record your bonus checks in QuickBooks Desktop.

 

In order to withhold your employee's taxes, we can create a bonus check then offset the net amount afterward. This way nothing gets added to your expenses for payroll wages. Let me guide you on how to do that:

 

Step 1: Create the bonus item.

  1. On your QuickBooks company file, go to Lists.
  2. Select Payroll Item List.
  3. At the lower left of the Payroll Item List window, select the Payroll Item button.
  4. Click New.
  5. Select Custom Setup, and then select Next.
  6. Select Wage, and then Next.
  7. Select Bonus, and then Next.
  8. Enter the name of this item, then select Next.
  9. Choose the expense account you want the item to track to and select Finish.

Step 2: Add the offset item.

  1. Go to the List menu.
  2. Press Ctrl + N on your keyboard.
  3. Choose Custom Setup and select Deduction.
  4. Click Next.
  5. Enter the name of the deduction (Example: Offset Item) and click Next.
  6. Select None then click Next.
  7. Click Next and choose Neither.
  8. Select net pay and click Next.
  9. Click on the Finish button.

Step 3: Create the bonus check and add the offset item.

  1. Go to the Employees menu at the top.
  2. Select Pay Employees.
  3. Choose Unscheduled Payroll from the list.
  4. Mark the employees you're creating the bonus checks, then select Open Paycheck Detail.
  5. Remove all earnings and additional items on the check.
  6. In the Earnings section, add the bonus item you created.
  7. In the Rate column, enter the gross amount of the bonus.
  8. In the Other Payroll Items section, add the offset item.
  9. In the Rate column, enter a negative amount. The rate should be the Check Amount of the paycheck.
  10. Once the net amount shows zero (0) click Save and Close or Save and Next to continue creating additional bonus paychecks.

Here's how it should look like:

 

To know more about creating a separate bonus check, please feel free to checkout this article: Pay A Bonus On Separate Paychecks In QuickBooks Desktop Payroll

 

Once done, the taxes from the bonus check will then create a liability in QuickBooks. You may want to check this article to know more about processing tax payments: How to use QuickBooks to pay payroll taxes and other liabilities

 

That should do it, Amy46. If you need further assistance, please feel free to let me know so I can get back to you. Have a good one!