cancel
Showing results for 
Search instead for 
Did you mean: 
taxangel
Level 1

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

 
Solved
Best answer March 25, 2019

Best Answers
JonpriL
Moderator

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

Glad to have you back, @taxangel!

 

Allow me to chime in for a moment and share additional insights about your Profit and Loss report.

 

First, you'll have to review and verify each of your payroll items created from the Payroll Items list.

 

Secondly, review your payroll expenses if it has the same amount with the payroll expense account of your Profit and Loss report.

 

After reviewing and the amounts don't match, make the necessary changes and add cash tips to your income manually.

 

Lastly, here's an article you can check out and proceed to Profit & Loss and Balance Sheet Detail reports: Customize Company and Financial Reports.

 

I'll be always around here in the Community if you have any other questions about your reports. Just leave it in the comment section below.

View solution in original post

6 Comments
Kristine Mae
QuickBooks Team

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

Hello there, Taxangel.

 

The payroll expense amount in the Profit and Loss report is the total gross wage. They don't match with the W-3 form. 

 

You don't need to create a journal entry for the cash tips. You can set it up in QuickBooks Online. Here's how:

  1. Click Workers, then choose Employees.
  2. Choose an employee, then click to open the employee's profile.
  3. Click the Pencil icon next to Pay.
  4. Click the Pencil icon in the Additional pay types section.
  5. Under You can also pay Employee, choose Cash Tips.
  6. Click Done, then Done again. 

You can refer to this article for more information: Cash tips.

 

If you have further questions, please leave a comment below. 

john-pero
Community Champion

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

Total payroll expense can also include employer share of taxes, if you set it up that way. Payroll taxes can be posted right along with property taxes on forms but to me is more confusing 

taxangel
Level 1

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

I am using Quickbooks Accountant  Desktop 2019  The W2's are issuing correctly with the tips being reported.  This client I have set up with Reported Cash Tips and Reported Cash Tips offset.  When I add up Gross Wages and employer's payroll taxes it does not add up to the Payroll Expense on the Profit and Loss.  I'm wondering if I need to add cash tips to the income manually?

JonpriL
Moderator

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

Glad to have you back, @taxangel!

 

Allow me to chime in for a moment and share additional insights about your Profit and Loss report.

 

First, you'll have to review and verify each of your payroll items created from the Payroll Items list.

 

Secondly, review your payroll expenses if it has the same amount with the payroll expense account of your Profit and Loss report.

 

After reviewing and the amounts don't match, make the necessary changes and add cash tips to your income manually.

 

Lastly, here's an article you can check out and proceed to Profit & Loss and Balance Sheet Detail reports: Customize Company and Financial Reports.

 

I'll be always around here in the Community if you have any other questions about your reports. Just leave it in the comment section below.

View solution in original post

taxangel
Level 1

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

Thanks for the reply but I'm using QuickBooks Accountant Desktop and these instructions don't apply.

Kristine Mae
QuickBooks Team

Should the Payroll Expense account on the P & L match the Form W-3 when there are Reported Cash Tips and Offset or do I need to create a journal entry for cash tips?

I've read your original question, Taxangel.

 

You don't need to add cash tips as an income. These are gratuities/rewards that are paid to employees in cash. Once your employee received a cash tip, you'll have to add it in the paycheck for tax purposes, then take out the amount so they won't get paid twice. I've got you an article for more information: Report tips in and out on employee paychecks in QuickBooks Desktop Payroll.

 

Regarding the Profit and Loss report, the payroll taxes amount is already added in the gross wage. Having said that, you no longer need to add up the payroll taxes to the gross wage amount.

 

Let me know if you have further questions. We're here to answer them for you. 

 

Need to get in touch?

Contact us
Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up