Can QuickBooks calculate payroll commissions, based on what is invoiced ? to the customer less sales tax? Sammy in Seattle

smoorman · ‎February 19, 2019

We are hiring our first commissioned sales person. I don't want to have to calculate their commissions in an excel spread sheet then convert it to QB as a payroll item. Can QB do the calculations based on sale or customer?

Anonymous · ‎February 19, 2019

Hey there, @smoorman,

Thanks for getting in touch with us today. I can share some insights about setting up a commission only employee in QuickBooks Desktop.

At the moment there isn't a way to auto-calculate the commission on your sales transaction and apply them to the employee's paychecks. You can, however, set up a commission item so you can automatically add it in the payroll check.

Here's how to create a commission item:

Go to the Lists menu.
Choose Payroll Item List.
Right-click anywhere and click New.
Choose Custom Setup.
Click Next.
Choose Wage in the Payroll item type window.
Click Next.
Select the Commission in the Wages screen. Click Next.
Enter the commission description then click Next.
Choose the Expense account.
Enter the commission rate.
Click Finish.

Once done, you can apply this item in the employee's profile. Here's how:

Click the Employees menu.
Go to the Employee Center.
Double-click on the employee's name.
On the Payroll Info tab, add the item under Earnings by clicking in the white box under item name and choosing the item from the drop-down list.
Enter the rate in the Rate column.

Once done, you can now pay the employee's commission on his check.

When you create the paycheck, you should see the commission item in the Earnings section. You must enter an amount in the Rate and Quantity columns to get the total commission amount.

That should get you on the right track. You can check out this article to know more about the process: Set up commission payroll item and reports

Please let me know if you have additional questions about your concern. I'm here to help you anytime, @smoorman.

View solution in original post

Anonymous · ‎February 19, 2019

Hey there, @smoorman,

Thanks for getting in touch with us today. I can share some insights about setting up a commission only employee in QuickBooks Desktop.

At the moment there isn't a way to auto-calculate the commission on your sales transaction and apply them to the employee's paychecks. You can, however, set up a commission item so you can automatically add it in the payroll check.

Here's how to create a commission item:

Go to the Lists menu.
Choose Payroll Item List.
Right-click anywhere and click New.
Choose Custom Setup.
Click Next.
Choose Wage in the Payroll item type window.
Click Next.
Select the Commission in the Wages screen. Click Next.
Enter the commission description then click Next.
Choose the Expense account.
Enter the commission rate.
Click Finish.

Once done, you can apply this item in the employee's profile. Here's how:

Click the Employees menu.
Go to the Employee Center.
Double-click on the employee's name.
On the Payroll Info tab, add the item under Earnings by clicking in the white box under item name and choosing the item from the drop-down list.
Enter the rate in the Rate column.

Once done, you can now pay the employee's commission on his check.

When you create the paycheck, you should see the commission item in the Earnings section. You must enter an amount in the Rate and Quantity columns to get the total commission amount.

That should get you on the right track. You can check out this article to know more about the process: Set up commission payroll item and reports

Please let me know if you have additional questions about your concern. I'm here to help you anytime, @smoorman.

smoorman · ‎February 19, 2019

Thank you. I look forward when the smart people @ QB can add a commission calculating module to the payroll. Sammy

jjeyesinvoice · ‎December 30, 2022

Can you also share how to do this with Quickbooks Online Payroll?

jenop2 · ‎December 30, 2022

I'd be glad to help and share details about paying commissions in QuickBooks, jjeyesinvoice.

Similar to the Desktop version, automatic calculation of commissions is not available in QuickBooks Online Payroll. However, there's a workaround where you can add a commission item. Then, manually calculate the amount before adding it to the employee's paycheck when creating them.

I'll also share the steps on how you can do it in the online version:

Go to the Payroll menu and proceed to the Employees tab.
Click the name of the employee.
Scroll-down to the Pay types section, then click Edit.
Look for Commission under the Common pay types section and check the box before it.
Click Save.

Once done, a box for Commission will show up in the Preview Payroll window. There is where you can type in the amount so it will added to the employee's paycheck.

Let me also share this article for additional details: Pay Your Employees a Commission.

Additional guidance and references when running payroll are also provided in these articles:

Please don't hesitate to reply to me and let me know if you're able to set up and pay commissions. The Community is always here if you need anything else.

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Can QuickBooks calculate payroll commissions, based on what is invoiced ? to the customer less sales tax? Sammy in Seattle