Set up commission payroll item and reports
This article describes how to track commissions paid to employees.
- Set up a commission payroll item.
- Add a commission payroll item to employee records.
Once you have created a commission item, you can apply it to all of your employees, even if the amount (or rate) of the commission is different for each employee. (You can set the actual amount or rate of the commission item on each employee's payroll record, or when you write a paycheck.)
If you have different types of commissions that you want to track separately in your reports, use a separate payroll item for each commission type.
You have already set up employees in QuickBooks, and you know how much commission you would like to pay.
Once created, the payroll item can be added to paychecks to pay out commission.
To set up a commission item:
Add a payroll item.
- QuickBooks Pro and Premier:
- From the Lists menu, click Payroll Item List.
- Click the Payroll Item button, and select New.
- QuickBooks Simple Start:
- Select Payroll on the top toolbar.
- Click Setup and Maintain and choose View/Edit Payroll Items.
- In the Related Activities section, choose Add Payroll Item.
Select Custom Setup and click Next.
From the Type list, choose Commission.
Enter the Item Name which prints on payroll checks and reports.
Enter an Expense Account.
If you want to set a rate, in the Default
Rate window, enter an amount or percentage to calculate this
commission. To enter a percentage, type a percent sign (%) after the
number. You can change this figure whenever you use the commission item.
To add the commission item to employee records:
Go to the Employee Center.
- QuickBooks Pro and Premier: Choose Employees from the top menu bar > Employee Center.
- QuickBooks Simple Start:
- Click Payroll from the top toolbar.
- Click the Employees button.
- Select View/Edit Employees.
Double-click on the employee's name.
Change the tabs to Payroll and
QuickBooks 2013: click Payroll Info tab.
Add the item under Earnings by clicking in the white box under item name and choosing the item from the drop-down list.
Enter the rate in the rate column.
Preparing your payroll
In the Preview Paycheck window for your commissioned employees, you should see the commission item. If you set up the commission item using percent (%) in the rate column, enter the quantity so QuickBooks can compute the commission based on the percent and quantity.
To view reports showing commission items:
Click the Reports drop-down menu, and select Custom Transaction Detail Report.
Click on Modify Report in the upper left corner.
On the Display tab, check Name and Source Name.
On the Filter tab, in choose filter, set the Transaction Type to Paycheck.
Set the Payroll Item to the commission item used on paychecks.