QuickBooks Asia

Classification of Payroll Expenses

How can you classifying your Payroll Expense into different departments?

To classifying your payroll expenses in QuickBooks, first you need to preset a class type in your employee profile. Under the Employee’s profile page, select ‘Payroll and Compensation Info’ from the ‘Change tabs’ drop down list, and then select a class type for this employee from the ‘Class’ field. In this case, we use ‘Sales’ class for this employee.

Starts your scheduled payroll as usual, the salary expenses such as Wages, Addition and Employer Contribution will be grouped into the correct class which has set in the employee’s profile. You can see the classification in the ‘Profit and Loss by Class’ report.

If you have set any ‘Deduction’ payroll item type in the employee’s profile, the deduction such as CPF Contribution by the employee will not class as according to the preset class type.

In QuickBooks, Class can only be use in Profit and Loss accounts and not Balance Sheet accounts.

Example: 

    Wages is $1,000.00 a month

    CPF Employer (Employer Contribution) is $145.00

    CPF Employee (Deduction) is $200.00

The double entry for this transaction will be:

    Debit: Wage Expense (Profit & Loss): $1,000.00

    Debit: CPF Employer (Profit & Loss): $145.00

Credit: CPF Payable (Balance Sheet, for CPF Employer): $145.00

Credit: CPF Payable (Balance Sheet, for CPF Employee): $200.00

Credit: Bank (Balance Sheet): $800.00

Therefore, when you presented the Profit and Loss by Class report, expenses such as Wages ($1,000.00) and CPF Employer ($145.00) will show in the report but not the rest of the payroll items that links to the Balance Sheet accounts.

QuickBooks Payroll reports

From the Report Centre, Employees & Payroll, allow you to print out some Payroll related reports. They are:

• Payroll Summary
• Payroll Item Detail
• Payroll Detail Review
• Payroll Transactions by Payee
• Payroll Transaction Detail
• Payroll Liability Balances
• Payroll Item Listing
• Employee Earnings Summary

You can consider printing out Payroll Summary report which shows the detail breakdown of each payroll item by employee.

Recording Pay Payroll Liability Transaction In QuickBooks

To pay your payroll liability such as CPF payment to CPF Board, click the ‘Related Payment Activities’ from the Payroll tab of the Employee Centre.

From the ‘Related Payment Activities’ drop down list select ‘Create Custom Liability Payments’ option.

In the Select Date Range for Liability window, select your date range for payroll liability payment.

In the Pay Liability window, ensure that your Bank account and Cheque date is correct; then select your liabilities to be paid from the payroll item list listed below of the page.

On the following page, is a Write Cheque form that enables you to edit the Cheque number and enter memo if required.

Print Pay Slip from QuickBooks

From Employee Centre, click the Print button and select ‘Print Pay Slips’ feature.

In the Print Pay Slips window, ensure the bank account and date range is correct. You have an option to change the Payslip style to either:

• <Standard – One per page>
• <Standard – Two per page>
• <Standard – Three per page> or 
• Quicken Standard Pay Slip.

Note:

Since this payroll feature was designed for Australian market, the Year-To-Date figure will be re-set to zero on 1^st Jul (Australia’s payroll year is from Jul to Jun).