How to separate or track COGS payroll taxes and Overhead payroll taxes?

redoaklandscape · ‎January 08, 2021

I need to be able to separate my COGS payroll tax expenses (employer portion) from Overhead payroll tax expenses (employer portion) for specific employees, one's who have both COGS and Overhead labor hours on the same weekly paycheck.

For example, I have an employee that works some hours each week doing overhead work and some doing COGS / Direct labor. How exactly would I go about separating the company payroll tax expenses into two accounts, one for COGS and one for Overhead expense?

I already have two payroll list items setup for him, one for his cogs labor and one for his overhead labor. That only separates his wages on reports / p&l statement, but I also need a separation for the payroll taxes.

I would do a GJE entry each month if possible, but I can't find a report that will show me a separation of the payroll tax for the COGS portion from the Overhead portion. They are combined into one total.

I know how to create payroll items but they only separate the wage itself. I need to know how to separate the payroll taxes and apportion them correctly so that I can have accurate p&l statements that show above and below the line items properly.

Jen_D · ‎January 08, 2021

It's nice to have you here, @redoaklandscape,

I want to share some insights about this reporting preference you want for your taxes. Currently, this feature you are looking for is not yet available in the program.

The system will allow you to select different wages expense accounts per payroll item. However, we're unable to show portions of taxes for each item on the reports.

In the meantime, you can continue using the JE method or manually track them on Excel worksheets.

Having this preference available would be helpful. For now, you can send some suggestions to our team so they are notified of your product feedback and suggestions.

To log a suggestion for our developers, go to the Help menu and select Send Feedback Online.

This thread will remain open for updates and additional questions. Please feel free to post here anytime if you need immediate help with QuickBooks.

IE CA · ‎May 23, 2023

Have they updated since 2021?

KlentB · ‎May 23, 2023

I'm chiming in on this thread to provide you with some updates regarding this option, IE CA.

Currently, the functionality to separate COGS (Cost of Goods Sold) from Overhead expenses is still unavailable in QuickBooks Desktop. The program uses one expense and liability account for all payroll taxes.

However, there is a workaround to achieve the desired separation. You can utilize journal entries to manually allocate the expenses between COGS and Overhead accounts. This allows you to effectively distribute and track them separately in your financial reports. I've outlined the general steps below:

Identify the portion of the associated payroll taxes.
Determine the allocation ratio for the specific employee and paycheck.
In QBDT, go to the Company menu and select Make General Journal Entries.
Debit/credit the appropriate expense accounts with the calculated amounts for each portion.
Add a memo as needed, then tap Save & Close.

For additional guidance in implementing this solution, I recommend consulting your accountant or bookkeeper. They can help ensure accuracy and compliance with accounting standards and regulations.

Please know that we value your input and take it into careful consideration when prioritizing feature enhancements. By submitting feedback, you contribute to shaping future updates and improvements to QuickBooks Desktop. Here's how:

Head to the Help menu.
Select Send Feedback Online, then choose Product Suggestions.
Pick a type and enter your comments.
Click Send Feedback.

Finally, here's an article that you can read to learn how to change the payroll item's expense or liability account: Manage payroll item.

Should you require further assistance in dealing with your other tasks, please don't hesitate to reach out. The Community is dedicated to providing continuous support.

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How to separate or track COGS payroll taxes and Overhead payroll taxes?