Knowledgebase

Allocating Percentage of Payroll to Different Classes

Question

In addition to allocating regular payments to classes they also allocate payroll to classes. Our goal is to allocate a standard percentage of each employee’s gross and benefits to the classes. For a salaried employee I have not been able to set up different percentages to the classes. The employee setup screen keeps splitting the salary evenly between all classes, whereas I need 55% to go to class 1 and 45% to go to class 2. Currently, I have set it up using the timesheets feature to specify how much of the week is spent in each class but this means I have to do a weekly timesheet for each employee for each week of the year. The employees spend the same amount of time in each class all year long. It would sure be a lot quicker if there is a way to do a timesheet for a period longer than one week or if there is any other way to set up a default percentage of payroll to go to each class on a 55%/45% basis. (There are actually 12 classes. I just used two in this e-mail to keep it simple).

Answer

There is no way to allocate payroll to classes by percentage. There is also no way to automatically assign a percentage of hours to classes on the timesheets. Everything on the timesheets must be entered manually, and there is no way to enter more than a week at a time. QuickBooks uses the actual amounts and classes you enter (or transfer from timesheets) in the earnings section of paychecks to classify the expenses. For salaried employees, you can enter the salary item twice. QuickBooks will assume that the total salary should be split evenly between the two classes. To change this, assign hours to each line in the proportion that you want wages to be allocated. In this case, you could enter 9 & 11 as the hours. QuickBooks will assign 45% and 55% of the wages to the respective classes. Unfortunately, there is no way to get QuickBooks to default to these hours again on the next check for salary payroll items. All the company tax items allocate in the same percentage as the gross wages. If you have many classes, a more practical solution may be to not assign classes on the paycheck and use a Journal entry to make the allocation. On the first line, enter the wage amount as negative and leave the class blank. On the following lines, split up the total wage amount and assign the appropriate class to each line. If the amounts to be allocated are consistent, memorize the journal entry and tell QuickBooks to enter it automatically each week. If the amounts vary week to week but the accounts and classes are consistent, memorize a journal entry with all the accounts and classes entered. Don’t use ‘Automatically Enter’. Enter $1.00 in the proper debit or credit column. Each week, go to the memorized transactions list (Ctrl-T), double-click on the transaction to enter it and fill in the correct amounts in place of the $1.00.