Withholding tithe from payroll of pastor

RDP2 · ‎August 13, 2021

Our pastor would like me to withhold tithe from their paycheck. Not clear how I do this in quickbooks (using desktop pro) and also get it recorded as income. I am used to using payroll withholding (liabilities) to pay taxes, etc via a check.

AlexV · ‎August 13, 2021

Hello RDP2!

Thank you for reaching out to us. Let me assist you with your payroll.

We can set a payroll item and assign an income account instead of a liability account. Although it is not an ideal way of setting it up, I can still show you how.

Follow these steps:

From the Lists menu, select Payroll Item List.
Click New from the Payroll Item drop-down.
Choose Custom Setup, and then select Next.
Follow the on-screen steps until you're on the Agency for employee-paid liability page. From there, select an income account under the Liability account drop-down, then Next.
When you're done, tap Finish.

Once done, you can assign it to the pastor's profile.

Go to Employees, then select Employee Center. Double-click on the employee's name.
From the Payroll Info tab, click on the blank area in the Additions, Deductions and Company Contributions section, below Item Name column.
Select the drop-down arrow, then select your withholding item. Enter other details needed.
Tap OK to save it.

I suggest you seek some help from your accountant for the best way to handle this, especially that this will affect your form filings. QuickBooks Desktop also provided payroll-related reports. These links will give you steps on how to pull up the commonly used reports:

Keep your posts coming if you have other concerns. I'll assist you!

View solution in original post

AlexV · ‎August 13, 2021

Hello RDP2!

Thank you for reaching out to us. Let me assist you with your payroll.

We can set a payroll item and assign an income account instead of a liability account. Although it is not an ideal way of setting it up, I can still show you how.

Follow these steps:

From the Lists menu, select Payroll Item List.
Click New from the Payroll Item drop-down.
Choose Custom Setup, and then select Next.
Follow the on-screen steps until you're on the Agency for employee-paid liability page. From there, select an income account under the Liability account drop-down, then Next.
When you're done, tap Finish.

Once done, you can assign it to the pastor's profile.

Go to Employees, then select Employee Center. Double-click on the employee's name.
From the Payroll Info tab, click on the blank area in the Additions, Deductions and Company Contributions section, below Item Name column.
Select the drop-down arrow, then select your withholding item. Enter other details needed.
Tap OK to save it.

I suggest you seek some help from your accountant for the best way to handle this, especially that this will affect your form filings. QuickBooks Desktop also provided payroll-related reports. These links will give you steps on how to pull up the commonly used reports:

Keep your posts coming if you have other concerns. I'll assist you!

RDP2 · ‎August 13, 2021

Hmm, I agree not ideal. Shows up as unclassified, don't see anyway to configure class for it. Guess it can be journaled to correct class.

MichelleBh · ‎August 13, 2021

Thanks for the quick response, @RDP2.

Good to hear that you agree with AlexV. I've got the steps here to ensure that your payroll item is labeled as classified in QuickBooks Desktop.

To start, I'd recommend modifying your class settings in your payroll preferences. Such that your employee's paychecks will tag to the appropriate class.

Follow the steps below:

Go to the Edit menu, then choose Preferences.
Click Accounting, then pick Company Preferences.
Mark the Use class tracking and Prompt to assign classes, then tap OK.
Select Payroll & Employees and pick the Company Preferences tab.
Make sure you use Full payroll to your QBDT.
Put a check mark in the Job Costing, Class, and Item tracking for paycheck expenses box.
Choose Entire paycheck if you want that your payroll will be prorated by class on reports. Then pick Earning item if you require to assign one class for each part on a paycheck.
Tap OK.

After that, you'll need to reassign the correct class to apply it to the payroll taxes. Let me guide you on how.

From the Employees menu, choose Employee Center.
Double-click the check and hit the Paycheck Detail tab on the lower right side.
Choose the correct class from the Class drop-down menu and tap OK.
Follow the on-screen instructions.

Additionally, you run the Payroll Summary report to review the data, then sort it by employee or class. See the sample screenshot below for your reference.

For the complete instructions, check out this link: Tracking payroll expenses by class, department, or location.

In regards to the Journal Entry, I'd suggest consulting an accountant. They can help you from there. Also, to make sure your reports and filings are accurate.

To know more about class tracking and job costing in QuickBooks, you can check out these helpful blogs:

If you have new topics about your QuickBooks, please feel free to share them with me in this thread. I'm happy to respond immediately. Always keep in safety.

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Withholding tithe from payroll of pastor