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Pay your employees a commission
by Intuit•29• Updated 3 months ago
Learn how to set up, pay, and track employees’ commission in QuickBooks Online Payroll and QuickBooks Desktop Payroll.
You can pay commission to your employees as their main salary or in addition to their regular pay in QuickBooks Payroll.
For paying commission-based employees, be sure to follow the federal and state laws. Talk to your accountants or agency to learn more about the regulations.
Step 1: Set up a commission pay type
For a better experience, open this article in QuickBooks Online. Launch side-by-side view
Commission as employee's salary
- Go to Payroll, then Employees (Take me there).
- Select your employee.
- From Pay types, select Start or Edit.
- From the Pay type ▼ dropdown, choose Commission only.
- Select Save.
Commission as additional pay
- Go to Payroll, then Employees (Take me there).
- Select your employee.
- From Pay types, select Start or Edit.
- In the Common pay types section, select Commission.
- You can change the Commission name if you want. Select Edit ✎ to change it.
- Select Save.
Step 1: Set up a commission pay item
- Select Lists, then Payroll Item List.
- Select the Payroll Item ▼ dropdown, then New.
- Select Custom Setup, then Next.
- Select Wage, then Next.
- Select Commission, then Next.
- Enter the item name, then Next.
- Select the Expense account where you want to track the item, then Next.
- Select Finish.
Step 2: Add the item to the employee’s profile
- Go to Employees, and then select Employee Center.
- Double-click the employee’s name.
- Select Payroll Info.
- In the Earnings section, add the payroll item you created.
- Select OK.
Step 2: Pay your employees a commission
For a better experience, open this article in QuickBooks Online. Launch side-by-side view
If you want to control the tax on the commission, you can pay your employees a commission on a separate paycheck. Commissions added on a regular paycheck will be taxed the same as regular wages.
Note: As a state regulation, hours are still required to be entered for Washington, Oregon, and Rhode Island. Enter the hours worked in the REGULAR PAY HRS field.
Pay "commission only" paycheck
Note: Split direct deposit or direct deposit to 2 accounts is not applicable for commission only paychecks.
- Go to Payroll, then Employees.
- From the Run payroll ▼ dropdown, select Commission only.
- Select the Edit ✎ next to Payroll Options, then select the following options::
- Use supplemental tax rates: You can use supplemental rates and the system will determine which rate is used based on the YTD of the last paycheck.
- Include retirement deductions if applicable: This will appear if an employee is set up for these.
- Add pay period: Option to add pay period will show once you select Apply.
- Select Apply. Note that Garnishments by default will be deducted.
- Enter commission amount.
- Select Preview payroll, then Submit payroll.
- Select Finish payroll.
Pay commission along with the regular pay
As you run your scheduled payroll, enter an amount in the Commission field
You can pay your employees a “commission only” paycheck or along with their regular pay.
For Washington, Oregon, and Rhode Island, you'll need to pay the commission along with the regular pay so you can track the hours.
Note: If your commission rate is an amount times the quantity, enter the commission amount in the Rate field and enter 1 in the Quantity field. If it is a percentage of an amount or quantity, enter the percentage rate with a percent % symbol, then the amount in the Quantity field.
Track your employees' commission
If you need to track your employees’ commissions, check out Run payroll reports in QuickBooks Online Payroll and QuickBooks Desktop Payroll.
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