Need to make changes or updates to your accounts or subscriptions? Visit the Account Management Page
QuickBooks HelpQuickBooksHelpIntuit

Pay your employees a commission in Online Payroll

SOLVED•by QuickBooks•Intuit Online Payroll•76•Updated January 28, 2022

Learn how to set up and pay commission to an employee.

Do you have a commission-based employee or an employee you want to give commission to? We’ll show you how to pay commissions to your employees in QuickBooks and Intuit Payroll.

What is a commission?

Commission is a form of compensation that's typically based on an employee's sales performance or completion of a task. Commission can be paid in addition to a salary or instead of a salary. Hourly employees who also receive a commission must be paid at least the minimum wage for hourly workers.

For commission employees, federal and state laws require the employee to get paid at least the minimum wage. If the employee's commission is low enough, they'll need to be paid the difference to meet the minimum wage limits.

As a state regulation, hours are still required to be entered for commission-only employees in:

  • Washington
  • Oregon
  • Rhode Island

To pay commission to your employees, follow the steps below for your product.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

Step 1: Set up commission as employee's salary or additional pay

You can either set your employee's pay to commission only or add commission as an additional pay type in your payroll product.

Commission as employee's salary

  1. Go to Payroll, then Employees.
  2. Select the employee's name.
  3. In the Pay types section, select Edit ✎.
  4. When finished, select Save.
  1. Go to Employees.
  2. Select the employee's name.
  3. In the Pay section, select Edit.
  4. In the How much do you pay section, select the ▼ dropdown and choose Commission Only.
  5. When finished, select OK.

Commission as additional pay

You can pay your employees a commission along with their regular pay. To do that, you need to add a commission pay type first.

  1. Go to Payroll, then Employees.
  2. Select the employee's name.
  3. In the Pay types section, select Edit ✎.
  4. In the Common pay types section, select Commission.
  5. You can change the Commission name if you want. Select the Edit ✎ icon to change it.
  6. When finished, select Save.
  1. Go to Employees.
  2. Select the employee's name.
  3. In the Pay section, select Edit.
  4. In the What additional ways do you pay employee section, select Commission.
  5. You can change the Commission name if you want.
  6. When finished, select OK.

Step 2: Pay employees a commission

Pay "commission only" paycheck

How is a commission only paycheck different from a regular payroll with commission pay? To learn more, see Pay commission separate from regular pay.

Note: Split direct deposit or direct deposit to 2 accounts is not applicable for commission only paychecks.

To create a commission only paycheck, follow the steps below for your payroll service:

  1. Go to the  Payroll menu, then select Employees.
  2. From the Run payroll ▼ dropdown, select Commission only.
  3. Select the Edit ✎ icon next to Payroll Options and 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.
  4. Select Apply. Note that Garnishments by default will be deducted.
  5. Enter commission amount.
  6. Select Preview payroll, then Submit payroll.
  7. Select Finish payroll.
  1. Go to Payday.
  2. Select the employee's pay schedule.
  3. From the Check Type ▼ dropdown, select Commission checks.
  4. Select Go.
  5. Choose the appropriate settings.
    • Use a federal tax rate (22% or 37%).
    • Include deductions and contributions such as retirement, HSA, and garnishment.
  6. Select a Period Start, Period End Date, and a Pay Date.
  7. Select the employees you want to pay, then enter the commission amount.
  8. When you're ready, select Create Paychecks and Approve Paychecks.

Pay commission along with the regular pay

On top of the employees' regular pay, you can also pay commission to them. Here's how you do it in your payroll service:

  1. Create a paycheck for the employee you want to pay commission.
  2. Enter an amount in the Commission field.
  3. Select Preview payroll, then Submit payroll.
  4. Select Finish Payroll.
  1. Create a paycheck for the employee you want to pay commission.
  2. Enter an amount in the Commission field.
  3. Select Create Paychecks, then Approve Paychecks.

Was this helpful?

You must sign in to vote, reply, or post
Intuit Online Payroll AccountantIntuit Online Payroll EnhancedIntuit Online Payroll Full ServiceQuickBooks Online Payroll CoreQuickBooks Online Payroll EliteQuickBooks Online Payroll Premium

Sign in for the best experience

Ask questions, get answers, and join our large community of QuickBooks users.

More like this