Job Costing and Labor Burden

Hello there, lwcontract. 

We'll have to manually allocate the payroll item to each job. Yes, you can change the rates calculated by QuickBooks. However, I recommend reaching out to your accountant for tax calculations since every time you edit the amounts and run payroll, QuickBooks will catch up on the expected liability threshold. 

I have a few articles that will help you in your payroll calculations: 

• Payroll tax wage bases and limits
• How QuickBooks calculates payroll taxes

The Community is always around to help you if you need anything else. 

Not exactly. Not wanting to change the rates, just WHERE it is appearing. I have COGS and Ordinary Expenses. Employee pay is correctly going to each job the employee worked on that week. I want 40% Labor Burden added to each job cost (will be a subtraction from Ordinary Expense and assigned to a particular job in COGS.) Right now, the following payroll taxes are also going to the job: FICA 6.2%, Med 1.45% FUTA .6%, SUTA .10%. Therefore, I have a made a payroll item called "Labor Burden" and have given it a rate of 31.65% which totals 40%. Would much rather have the 4 payroll taxes NOT go to the job and just have a one-liner called Labor Burden at 40%.

Here's the problem. Example of an employee earning $1000. When I look at a Job Profitability report, I see a total of $1400 (consisting of 6 line items of $1000 pay, Labor burden $316.50, FICA $62, Med $14.50, FUTA $6, SUTA $1.) When I run a Profit & Loss Statement, the COGS sold section is only $1316.50. It should be matching the $1400, but it is only showing the Direct Labor of $1000 and Labor Burden of $316.50. In ordinary expense, there is the offsetting Labor Burden of (316.50) but all the tax items are still listed as an ordinary expense and are not associated with COGS.

How can I make the COGS match the correct job cost detail? Do I have something set up incorrectly?

Hi @lwcontract,

The taxes of the employee are unavailable to tag as a cost on jobs in QuickBooks. Only the salary or hourly rate paid employees can be tagged as a cost on a job.

I recommend reaching an accountant if it needs to create journal entries for the purpose of tagging them to a job. Let me show you how to create a journal entry.

1. Go to the Company menu.
2. Choose Make General Journal Entries.
3. Fill out the necessary fields to create the entry and ensure the debits equal the credits when you’re done.
4. Hit Save & Close.

I’m adding this article you can read what the preferences available for payroll and how to set them in QuickBooks: Set Preferences for Payroll.

Feel free to post again if you have any other concerns related to QuickBooks.

That is incorrect. The taxes on the employee ARE following the hourly rate and being allocated to the job on the Job Actual Cost Detail and the Job Profitability Summary. However, the costs are reported differently on the Profit & Loss Statement. The reports should have the same totals as far as costs (i.e., the COGS on the P&L should match actual costs on the job reports.)

If the above problem can't be fixed, how can I make the payroll taxes NOT be allocated to the job on the Job Actual Cost Detail and Job Profitability Summary?

The program will automatically assign the company-paid taxes to the job selected in the transaction, lwcontract.

For now, we're unable to automatically remove or unassign these taxes to the assigned job. Here's an article about job costing to give you more details on how the feature works in in QuickBooks Desktop:

• Set up job costing and item tracking
• Tracking job costs in QuickBooks Desktop

In order to move the expense amounts from one account to the other, you can continuously use the journal entries. However, we recommend that you consult your accountant prior to creating these changes. This is to make sure that your job costs and expenses are moved correctly. 

We'll also be sending your feedback as a feature request to our product engineers. They're always on a lookout on customers' suggestions and feedback like this one to be reviewed for future updates. 

Reach out to us again anytime you have other questions when running payroll or reviewing reports in QuickBooks.

Thank you for your reply. Sounds like this is a programming error in quickbooks so I will continue to make adjusting entries to fix the Profit & Loss statement. I did look at the articles you listed, but they were geared more toward a new company setting up job costing so weren't applicable to our situation.

I like the program automatically assigning the company-paid taxes to the job selected. These amounts appear correctly on any Job Cost or Job Profitability Reports. However, it does seem like a programming error that the taxes are not reflected in the same way on the Profit & Loss statement. Cost of Goods Sold should be the same no matter what report it is on. Thank you for sending this problem to the product engineers. It definitely isn't a "feature request" but hopefully they can fix the problem. As far as a "feature request", it would be nice to choose whether we wanted the company-paid taxes to follow a job or not. Then I could set my own Labor Burden in totality (i.e., 40%) without having numerous line items on the Job History Reports listing every payroll tax separately.