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How to Job Cost Only Wages without Payroll Taxes in QuickBooks for Contractors
Published 10/06/2010 | 
Do you have any idea if it is possible to suppress payroll taxes from being charged to Jobs in QuickBooks Payroll?
I’ve never had anyone ask this before. It’s usually the reverse, but I love a new challenge! As I'm sure you noticed, you aren't given the option to turn off the Track Expenses by Job option in the payroll tax items. But you can on addition and deduction payroll items, so here's my workaround:
- Go to Lists > Payroll Item List, click on the Payroll Item button and select New.
- Create a deduction payroll item called something like "Non-Job Payroll Taxes”. Select EZ Setup, Other Deductions, check the Track Expenses by Job box, and map it to your payroll tax expense account. Don't change any of the other defaults until you get to Gross vs. Net. Change this to gross pay. You can enter an estimated % for all payroll taxes (make sure to enter the “%” after it) or if you want really accurate job costing you may want to create separate payroll items for each tax so you can set the % and upper limits for each one. Just don't forget to adjust your numbers each year.
- Create an addition payroll item called something like “Non Job Payroll Taxes”. Note: the name must be slightly different from the deduction item you created above. Follow the same steps as you did when creating the deduction payroll item, except select Other Additions as the account type and do not check the Track Expenses by Job box. If you created separate deduction items for each of your payroll taxes above, you'll also need to enter separate addition items.
- Add the new deduction and addition items to each employee’s Payroll and Compensation Info tab. Note: you must enter the deduction payroll item on top of the addition payroll item, or you will change the amount of net pay.
- When you create paychecks for these employees in the future, the deduction payroll item will reduce the job-costed payroll taxes (because you selected Track Expenses by Job) and the addition item will increase non job-costed payroll taxes (because you didn't select Track Expenses by Job). As long as you always enter the deduction item above the addition item, the net impact on your overall financials is $0.
- You can also edit prior paychecks by unlocking them. Just make sure that the net paycheck doesn’t change and the deduction item is always listed first.
Written by +Ruth Perryman, CMA, CFE, CFM, MBA
Ruth is the president of The QB Specialists, Inc. and has provided QuickBooks help to thousands of businesses around the world since 1996. She is an Intuit Solutions Provider, an Advanced Certified QuickBooks ProAdvisor, and a member of the Intuit Trainer/Writer Network. She is also certified in QuickBooks Point of Sale and QuickBooks Enterprise Solutions.
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