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jean17
Level 1

I received my PPP loan. My employees wages are based on tips but we will pay an average. How do I set this up in QB?

 
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Anna S
QuickBooks Team

I received my PPP loan. My employees wages are based on tips but we will pay an average. How do I set this up in QB?

Good evening, @jean17.

 

I know running your business during this challenging time can be a bit tough, but I'm here to help.

 

You can record the PPP loan in QuickBooks Online and keep track of the repayment if loan forgiveness isn't an option for you. First, you'll need to create a liability account to record the loan and its payments. The steps below will show you how:

 

  1. Navigate to the Gear icon and press Chart of Accounts.
  2. Push New to create a new account.
  3. From the Account Type drop-down menu, choose Long Term Liabilities or Other Current Liabilities if you're paying off the loan by the end of the year.
  4. In the Detail Type tab, pick Notes Payable.
  5. Name the loan and select when you want to start tracking your finances.

 

       6. Enter the full loan amount as a negative amount in the Amount field.

       7. Hit Save and Close.

 

Next, you'll need to record the money you got from the loan using a Journal Entry. This will allow you to track the money you spend and enter it in payments or all at once. You'll want to choose the liability account for the Credits column and appropriate asset account for the Debits column. Last, you can record the loan payment by following these steps:

 

  1. Go to the + New menu and pick Check.
  2. Enter the Category Details as follows:
    • First line: Liability account for the loan and the payment amount.
    • Second line: Expense account for the interest and amount.
    • Additional lines: Any other fees and the appropriate accounts.
  3. Press Save and Close.

 

Now you have your loan set up, and you can decide the pay rate/hours it takes to pay your employees using the loan. 

 

I'm always here to lend a helping hand if you have any other questions. Wishing you continued business success now and in the future.

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