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nomij
Level 3

Can I add an "Employee Advance" payroll payment type to a commission only employee?

I was able to create a payroll payment type called "Advance" an set it as a Reimbursement type so that it was not included as taxable income on the T4. But, in they payroll settings section, I can only assign expense type GL accounts to the reimbursement type, and the advance goes onto the P&L. When in fact, the advance needs to go to the Balance sheet.
Solved
Best answer May 06, 2020

Best Answers
Rochelley
Level 8

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Hello @nomij 

 

This process is slightly convoluted.  The only way to give your employee a non-taxable advance is to use the Reimbursement item.  But because this item was designed to actually reimburse an employee for expenses they paid out of pocket, it tracks to an expense account and only lands on the P & L.

 

When an employee pays back an advance, you can create an advance item on the Deductions side of things.  This tracks to a current asset account.  Unfortunately, you cannot enter a negative amount in here, which would solve this whole issue if you could.

 

The only way to marry the two, is that you have to use a JE to CR the initial advance (that was a Reimbursement type) from the expense account it was debited to, and DR the Advance account that the payback was posted to.

 

Did I mention this is convoluted? :)

 

Good luck!

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8 Comments 8
Rochelley
Level 8

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Hello @nomij 

 

This process is slightly convoluted.  The only way to give your employee a non-taxable advance is to use the Reimbursement item.  But because this item was designed to actually reimburse an employee for expenses they paid out of pocket, it tracks to an expense account and only lands on the P & L.

 

When an employee pays back an advance, you can create an advance item on the Deductions side of things.  This tracks to a current asset account.  Unfortunately, you cannot enter a negative amount in here, which would solve this whole issue if you could.

 

The only way to marry the two, is that you have to use a JE to CR the initial advance (that was a Reimbursement type) from the expense account it was debited to, and DR the Advance account that the payback was posted to.

 

Did I mention this is convoluted? :)

 

Good luck!

nomij
Level 3

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Thank you for your reply!  It is very helpful!

QBO is great, until you get to the Payroll module.  So, it's hard to know if I just don't know how to do something correctly, or if it just is created incorrectly.  A simple "advance" should be standard, no adjusting JE should be necessary.  

QBO also does not believe commissions should have vacation pay calculated on them.  They probably should check with CRA on that one. 

The vacation pay is scary to me how much it is incorrect.  

And you cannot use the ROE that QBO produces with ROEWeb.  Related to the PP that vacation pay earned vs paid, when I asked QBO about it, they replied that ROEWeb is incorrect. 

I'm at the point of advising people to not use QBO payroll until it's properly redesigned.  Unfortunately, I am now stuck with it for about half of my clients before I realized it was so poorly designed.  (I had used QBD Payroll for years and assumed QBO payroll would be similarly competent.)

But that QBO bank feed... LOVE IT.  Best bank feed in the industry.  QBO is still the best imo!  C'mon payroll dept, re-do the payroll module already!!

Thanks again for your help!  And sorry for the rant.  I am a QBO fan.  I just feel let down by the payroll module.

AddieC
QuickBooks Team

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Hi there,

 

Thanks for continuing the discussion and sharing your thoughts about QuickBooks Online. I'm so glad you're a fan of QBO, and that you're loving the bank feed! The way the bank feed has been designed is so helpful for your business, especially during reconciliation time. I also love the ability to add transactions from the feed, saving tons of time with data entry.

 

In regards to the Payroll module, I can assure you that we work closely with experts to align our systems with CRA guidelines. It's our goal to continuously improve and offer amazing payroll capabilities. I'd encourage you to submit your feedback about Payroll directly to our engineering department by clicking the Gear icon > Feedback

 

These messages are read daily, and your suggestions are so important to us. 

If you have any other questions or concerns, please don't hesitate to reach out to our tech support team


Enjoy your day!

jackiejetta8
Level 1

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Hmmm  Why can't QBO just allow a payroll item to link to the Balance Sheet - I have a client who accidentally used "Allowance" to give an advance to her employees.  It would be simple to be able to link it back to the account where the advance deducted is linked to: "asset account - Employee Cash Advances".  It would be an easy fix. :)

 

 

JamesM4
QuickBooks Team

Can I add an "Employee Advance" payroll payment type to a commission only employee?

hello jackiejetta8. Thanks for chiming in on this thread. I can see the importance of being able to link a payroll item to Balance Sheet. New product ideas are largely based on the feedback we get from users like you and I encourage you to send feedback about this to our engineers. You can do this by clicking on the Gear icon and looking for Feedback. Feel free to ask other questions, I'm here to help. 

DirkDoncic1
Level 1

Can I add an "Employee Advance" payroll payment type to a commission only employee?

So if I want to pay an employee a non-taxable advance, should I just categorize it as a reimbursement?

Trish_T
QuickBooks Team

Can I add an "Employee Advance" payroll payment type to a commission only employee?

Hi DirkDoncic1,

 

Thanks for joining us here.  It's important that you're on the right track with giving an advance to an employee in QuickBooks Online.  I'd be happy to provide this helpful guide for your reference to assist with the Advance Payment process.  If you have any additional concerns, please reach out to your accountant for their expertise and best course of action.  If you don't have an accountant, we can help you locate a ProAdvisor in your local area.

 

Please feel free to reach back out if you have any other questions.  We'd love to help!

Kanch
Level 1

Can I add an "Employee Advance" payroll payment type to a commission only employee?

We have commission employees and when we pay out income taxes on commissions, each time, we need to calculate the taxes manually. We need to deduct taxes based on numbers on TD1X form. Can someone let me know how do you calculate taxes.

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