Commissions are typically calculated outside of accounting software in an Excel template. Go to Account and Settings, Advanced, Categories, and turn on Track Classes. QBO will not automatically calculate sales commissions.
Setting up classes in QBO to track commissions due by sales item is a good idea. As you will then be able to run an report by class to import to Excel and then drop-in a formula to calculate the commissions due.
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.
You can add multiple types of commission pay and give each one a unique name. The custom pay types will then be available when you set up your other employees. It is however considered regular wages for tax purposes, and it is mapped as such, the mapping places the commission wages in the right box on the tax form. You can also Go to Gear> Payroll Settings>Accounting and click "I use different accounts for different wages", where you can allocate Commission to another expense account such as "Commission Expense"
Taxability:
FIT SS Med FUTA
| Taxable | Taxable | Taxable | Taxable |
How it's reported on federal forms:
941 940 W-2
| Boxes 2, 5a, 5c | Regular Wages | Regular Wages |
