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    How to set up job costing and item tracking for payroll expenses

    Article ID: 1000796

    Overview

    This article explains how to set up job costing and payroll item tracking so you can to track expenses by job.

    Assumptions

    You have an active, up-to-date version of QuickBooks.

    Expected Outcome

    The assigned amounts show up in the Profit and Loss by Class report.

    Details

    When you follow these steps to set up your preferences, QuickBooks will automatically track expenses by job for company payroll expenses, such as employee wages from earnings items and employer taxes.

    If you would also like to track payroll expenses by job for Company Contributions, Additions, and Deduction type payroll items, you must edit the individual payroll items to select Track Expenses by Job for reports to populate properly. On paychecks, QuickBooks prorates additions, deduction and company contributions (company-paid taxes) by your jobs, classes, or service items using the ratios it derives from the way you split up earnings in the Earnings table. See the additional steps at the bottom of this article.

    Set up preferences to job cost and item track paycheck expenses:

    From the top menu bar, choose Edit > Preferences.

    From the list in the left pane select Accounting.

    Click on the Company Preferences tab.

    Make sure there is a checkmark in the Use class tracking box.
    Note: If this is not marked then the options to Assign one class per Entire paycheck or Earnings item will not not be available.

    Click the OK button.

    From the top menu bar, choose Edit > Preferences.

    From the list in the left pane select Payroll and Employees.

    Click the Company Preferences tab.

    Put a checkmark in the Job Costing, Class and Item tracking for paycheck expenses box and select whether to track by Entire Paycheck or Earnings Item.

    When you create or edit payroll items that are additions, deductions or company contributions, QuickBooks displays a checkbox called Track Expenses by Job in the Name used in paychecks and payroll reports window of the Payroll Item Setup wizard. If you select this box, QuickBooks prorates those items on employee paychecks the same way it does company-paid taxes. See the steps below for additional instructions.

    To select addition, deduction and company contribution items to track expenses by job:

    1. Choose Lists > Payroll Item List.
    2. Right-click the Payroll Item and select Edit Payroll Item.
    3. Select Track Expenses by Job.
      Note: It is important to follow the above steps to set up job costing preferences. If job costing is not set up in QuickBooks you will not see the option to Track Expenses by Job when you edit the payroll item.
    4. Click Next until you can click Finish.
    5. Repeat for each payroll item that you want to track.
    Marking Track Expenses By Job will not add a Customer:Job column to the payroll items listed under Other Payroll Items on a paycheck. Instead, in reports, these items are divided based on the division of the earnings items on the paycheck.
    Turning on Track Expenses by Job does not affect existing transactions.

    13 comments

    Joe2/20/2013

    10

    I have done all of this but payroll taxes do not have the option to check Track Expenses by Job and thos are the items that are not being allocated to my job costing accounts. They all go to my payroll expense account that I have to identify in the set-up. I think if I identify a COGS account it will all go there.

    Reply

    Becky3/5/2013

    03

    We are a non-union company that pays fringe benefits to our workers instead of the union on Prevailing Wage jobs. We have added the fringe benefits to payroll through Other Payroll Items. For job costing purposes we need to job cost the fringe benefits to each job correctly. Example: a person works on a regular non-prevailing wage job 25 hours a week, and Prevailing Wage job A (with fringe benefits) for 10 hours a week, and Prevailing Wage job B (with fringe benefits) for 15 hours a week. How do we get an accurate job cost for all the jobs? PS we enter payroll through Weekly Time Sheet, some days have 15 lines per person reflecting 5 different jobs they might work on.

    Reply

    Susan3/6/2013

    Hi Becky,

    We have a few reports that you can choose from. I recommend looking in QuickBooks and clicking Reports > Report Center > Jobs, Time & Mileage for a list of reports about Jobs & Profitability. Thanks.

    Becky3/7/2013

    Susan, thanks for replying. I have looked at the reports and have not found one that will job cost any payroll items entered through the "Other Payroll Items" window in the Preview Paycheck" section. Is that your understanding also?

    Susan3/8/2013

    Hi Becky,

    Try this report, Reports > Report Center > Jobs, Time & Mileage > Job Profitability Summary. When you get to this report and adjust the date range appropriately, double click the Act. Cost for the job you are looking at. This will open the Job Actual Cost Detail. This provides a breakdown wages, other items and company paid taxes by job. One thing to note here, is for items under Other Payroll items, (additions, deductions or company contributions) the box, Track Expenses by Job, must be checked in the Payroll Item for reports to populate properly. I hope this helps. Thanks again.

    Doreen3/12/2013

    01

    I set up the job tracking in preferences; however, when I go into an employee's paycheck and select the reimbursement item (miscellaneous addition), I don't know where to apply it to a job. How do you do this from the paycheck?

    Reply

    Susan3/24/2013

    10

    Hi Doreen,

    You are correct, you cannot choose an individual job for items listed Other Payroll Items on a paycheck. On paychecks, QuickBooks prorates additions, deductions and company contributions (company-paid taxes) by your jobs, classes, or service items using the ratios it derives from the way you split up earnings in the Earnings table. Thanks for your comment.

    david2/4/2013

    1.Choose Lists > Payroll Item List.

    2.Right-click the Payroll Item and select Edit Payroll Item.

    3.Select Track Expenses by Job.

    4.Click Next until you can click Finish.

    5.Repeat for each payroll item that you want to track.

    wrong!

    goes straight to the wizard.

    does not even give this option to check.

    -5, next time show your work.

    Reply

    Jo Ann2/4/2013

    Hi David,

    I work for Intuit and saw your comment. I have made some updates to the instructions in the article and hope this helps. Thank you for posting a comment.

    Fatima2/24/2013

    Hello,

    I have followed the instructions and the Track Expenses by Job checkbox only appears in payroll items of the type additions.

    Reply

    Susan2/27/2013

    11

    Hi Joe and Fatima,

    I am an Intuit employee and saw your comments. After you set up your Preferences, QuickBooks will automatically track expenses by job for company payroll expenses, such as employee wages from earnings items and employer taxes. If you would also like to track payroll expenses by job for Company Contributions, Additions, and Deduction type payroll items, you must edit the individual payroll items. I have updated this article to clarify this process in QuickBooks. I hope this helps, thanks for your comments.

    Erin7/17/2013

    There is no Company Preferences tab (step #8). I have to go to the Payroll Setup tab under Employees to change any preferences for payroll but then the rest of these steps don't work. I am using Quickbooks Online.

    Reply

    Jo Ann7/17/2013

    Hi Erin,

    This is a QuickBooks for desktop article. Try this article for our QuickBooks for online article Set up class tracking in QBOP.

    In the future when you come into the site if you select your payroll product as Intuit Online Payroll you will have access to only the articles related to our online products.

    Hope this helps. Thanks for commenting.

    Comments can not be added at this time.

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