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LaterWhen
Level 3

Payroll Class workaround QBO

Quick Books Online payroll currently only allows one Class per employee.  I want to split a salary between 2 classes.  Would adding a "Bonus" pay type assigned to the second class be a manageable workaround.  eg Mary's annual salary is $60k.  $40k should go to Class A and $20k should go to Class B.  Would it work to set Mary's salary as $40k, with Class=A, and then add a Bonus pay type of $20k/12 (Class - B) every month? Would all taxes, CPP, EI etc be the same as if she was paid $60k in basic salary? 

1 Comment 1
LauraAB
QuickBooks Team

Payroll Class workaround QBO

Welcome back, LaterWhen,

 

I hope that you've been well since we last touched base. I know how useful class tracking can be for reporting purposes, so I appreciate why you're looking for a workaround for tracking classes in QuickBooks Online Payroll. I'd be happy to go over this further with you.

 

As you've highlighted, when working with class tracking and QuickBooks Online Payroll, the option is to assign a single class to an employee and there isn't an option to use class tracking with this module otherwise. It sounds like you've got the beginnings of a workable solution though, and I can flesh it out a bit more to show how it could work in the program.

 

While there isn't a way to assign a class to a pay type, creating multiple pay types for the ones you want tracked separately and even mapping them into different accounts could work. Doing this essentially becomes the "class" tracking that you're looking for without actually assigning classes. Here's what you can consider with setting up another pay type, although I strongly recommend connecting with an accountant to make sure this is appropriate for your books.

 

In testing, I see that having the usual pay type as well as using something like the Other earnings pay type for the amount you want separated will work both to split these amounts out for tracking and to keep your calculations correct. By having the two payroll items, you can use them both in the same pay run.

 

There are a number of pay types you can choose from, so this article is useful for seeing what QuickBooks Online Payroll includes: Supported pay types and deductions explained. Here's how you go about creating that.

  1. In the Payroll section of your books, select an employee.
  2. Click Edit employee.
  3. Click the pencil icon for the How much do you pay [employee]? section.

From there, you can use the various options to set up the pay type you'd like. Knowing which is best when you're not sure is another great question for an accountant.

 

Next, if you'd like to change the mapping for your payroll to your chart of accounts, here's an article that walks you through it: Payroll set up: Payroll preferences. It's in the same area that mentions class tracking for payroll, so you're likely familiar with this process, but feel free to review the article as needed.

 

That should get you on your way. If you'd like to connect with an accountant right in your QuickBooks, you can use the My Accountant tab to either invite your existing accountant on as a user or use the Find a pro to help button in that tab to research our list of QuickBooks-savvy accountants near you.

 

I also invite you to submit feedback about QuickBooks Online Payroll to share with our product development team what sorts of changes to the module would be useful for you. Here's how to do that: How do I submit feedback? If you're even curious about new features to the program, check out this page: QuickBooks Online Feature and Product Updates

 

I hope this has helped. :) See you next time!

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