QuickBooks Tip – Employees With Multiple Rates of Pay
A customer called with the following question:
We have 25 employees on the payroll at all times – more in the summer when things are busier. My employees can earn multiple rates of pay in one week (sometimes even in the same day) on the same or multiple jobs. How do I handle this in QuickBooks without always having to manually change the pay rate when I create their paychecks? To be more specific, let’s talk about “Joe”. Joe can work as:
- a laborer making $12.00 per hour
- a dozer trax operator making $17.00 per hour
- a skid steer operator making $18.00 per hour
- a supervisor making $25.00 per hour
This is indeed a complex situation, as well as a very common one, and having to manually change the rate of pay accordingly when creating the paycheck is highly error prone.
To successfully handle this task:
- Create new hourly payroll wage items in QuickBooks called Laborer, Dozer, Skid, and Supervisor – which represent each of the different Work Classifications that your employees are paid under.
- Edit Joe’s employee record, go to the Payroll & Compensation tab, add these new payroll wage items to his Earnings section by clicking into the Item column and selecting the newly created payroll items and assign the correct rate of pay.
- While you are in the Payroll & Compensation tab, make sure that the option to “Use time data to create paychecks” is checked.
- Enter Joe’s hours using the Weekly Timsheet function, splitting out and assigning how many hours he work on each job during the week and selecting the appropriate Payroll Item for the task.
- When you create Joe’s paycheck, QuickBooks will automatically pull in the correct rate that you assigned to each Payroll Item in Joe’s employee record.
Setting up QuickBooks in this manner makes the program work for you, instead of you having to always remember to manually make the pay rate changes.
- A clearly visible audit trail for Worker’s Compensation Audits, as these Payroll Items now correspond to employee work classifications.
- Accurate pay checks.
- Less stress.
Having to manually create new payroll items AND then update 25 employee records with new payroll wage items and rates of pay is a time-consuming process as you have to do each payroll item and employee one at a time.
Check out Wage Manager Solution, a QuickBooks integrated application designed specifically to automate this process.
Watch a 10 minute video which provides an overview of how Wage Manager Solution works.
2 Responses to QuickBooks Tip – Employees With Multiple Rates of Pay
Leave a Reply
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Using Account Numbers in Your QuickBooks Chart of Accounts
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- How To Turn On and Use Manual Payroll in QuickBooks
- QuickBooks Tip - Child Support Garnishments
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- Welcome to the QuickBooks for contractors blog
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks Tip - Determing Cost of Goods Sold
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks 2015 Announced - Important System Requirements
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks 2015- The Good, Bad and Ugly, Part 1