DESKTOP EDITION CLOUD EDITION SERVER EDITION THEMES GUIDES FORUM
Guides

Set up payslip items

Payslip items are specific elements that can appear on payslips. They are necessary so entries on employees’ payslips will be posted to the proper account or accounts. Therefore, you must define at least one payslip item before you can issue your first payslip. Every payslip item must be one of three types:

Enable the Payslips tab

Before payslip items can be defined, you must enable the Payslips tab. Under the left navigation pane, click Customize, check the box for Payslips, then click Update below the list:

Earnings items

Earnings items are typically wages, salaries, bonuses, commissions, and various allowances you will pay to employees. Employees, in turn, will see earnings on their payslips broken out into these categories.

Go to Settings, then Payslip Items, locate the Payslip Earnings Items list, and click New Payslip Item:



Give the earnings item an informative Name, such as Regular wages, Holiday pay, or Vacation. By default, earnings items are posted to the Wages & salaries Account, which is activated automatically when the Employees tab is enabled. But you can link the earnings item to another expense account, if required:

Click Create to save the earnings item, which will appear on the Payslip Earnings Items list:

Note
Earnings items must be posted to expense accounts because they are expenses of the business in the current accounting period.

Deduction items

Deduction items include payroll taxes, insurance premiums, union fees, or wage garnishments you subtract from an employee’s pay. Employees will see their deductions broken out into these categories.

Deduction items are defined the same way as earnings items, except that you click New Payslip Item for the Payslip Deduction Items list:

Give the deduction item an informative Name, such as Income tax. By default, earnings items are posted to the Payroll liabilities Account, which is activated automatically when the Employees tab is enabled. While you can allocate all deduction items to the general Payroll liabilities account, it may be preferable to set up individual liability accounts for every deduction item to track liabilities separately on the balance sheet:

Click Create to save the deduction item, which will appear on the Payslip Deduction Items list:

Note
Deduction items must be posted to liability accounts because deductions from an employee’s gross pay (e.g., payroll tax, union fees) are payable to someone else (e.g., tax authority, union) by the business.

Contribution items

Contribution items are paid by an employer and characterized as both earnings and deductions.

Example 1
You are required to deposit a certain percentage of an employee’s gross pay into a pension or superannuation fund. This is regarded as a contribution. It represents a type of employee earnings paid by the employer, but is deducted from gross pay at the same time and subsequently paid into the employee’s pension fund.

Example 2
You have a matching gift program under which you add to an employee’s charitable contribution. Your matching gifts would normally be earnings for the employee and an expense for you, but the simultaneous deduction also makes it a liability you will pay to the charity.

Contribution items are defined the same way as earnings and deduction items, except that you click New Payslip Item for the Payslip Contribution Items list:

Give the contribution item an information Name, such a Matching gift. By default, contribution items are posted to the Wages & salaries Expense account and Payroll liabilities Liability account. You can select other accounts, if required:

Click Create to define the contribution item, which will appear in the Payslip Contribution Items list:

Products

Support

Subscribe to Updates

Subscribe to our newsletter and get exclusive product updates you won't find anywhere else straight to your inbox.

© 2017 - Based in Sydney, Australia but providing goodness globally