In QuickBooks Payroll, salaried employees always have exactly one salary, as is the case in the real world.
Building on that, you can use one or more salary items on an employee record, and you'll see they will all have the same salary, the annual salary. If the employee's salary is $52,000 and you use three salary items on the employee record (for whatever reason) you'll see that all three of them will have $52,000 as the salary, and if you change one the others will change as well.
Using the $52,000 salary as an example:
- If you have one item and you pay the employee weekly, that one item will default to $1000 for the period.
- If there are two salary items set up on the employee record, then each will default to $500 for the period, and if you have three, each will default to $333.33, except one of them which will get the remaining cent and show $333.34.
- If you then enter hours on the earnings table of the paycheck, the $1000 total salary will be redistributed according to those hours. So, if you enter 10 hours on one of these items and 30 on the other, one will calculate as $250 and the other $750.
The most common use for this model is probably when recording sick and vacation for the salaried employee. For example, if there are two salary items used on a paycheck for the example employee above, where one is vacation, and you enter 8 hours for vacation and 32 hours on the standard salary item, then the amount for salary vacation will calculate as 8/40's of the total salary and the regular salary will be 32/40's, or $200 and $800.
You'll be able to see this happening as you create paychecks, both on the paycheck preview window and on the confirmation slide where you can see the gross pay, deductions, taxes, and net pay.
Tips:
- Be sure to set up and use a salary item with the sub-type vacation and then this will work seamlessly (don't use an hourly vacation item).
- If you want to set a default vacation (or sick pay) item that is used for each employee, add it to the employee's earnings table (where you will then see the salary duplicated on each row where you use a salary item.) It will then appear by default in the create paychecks window where you're able to enter hours.
