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To accurately calculate and track any transactions related to your company payroll, QBM Payroll depends on payroll items. Incorrect or incomplete setup of payroll items may cause problems when running payroll and paying payroll liabilities.
A payroll item is an object that QBM uses for payroll calculations and reporting. Everything you track on a paycheck is tracked with a payroll item. These include salaries, hourly wages, sick time, commissions, holiday, or business expenses. When you create any kind of payroll transaction in QBM, the transaction is tracked using payroll items.
There are two broad types of payroll items in QBM:
Income
Deduction
An income payroll item, tracks the wages that you pay to employee. It is an income for the employee.
A deduction payroll item, tracks the employee payment to the company. Examples of payroll deductions include union dues, loan repayments, employee-paid insurance, and employee contributions to a 401(k) plan in the USA.
When you change something in your business that affects how your employees' paychecks are calculated, you need to create a new payroll item or edit an existing payroll item. For example, let's say you start offering health benefits and you want to deduct your employees' contribution from their paychecks. You'd need to set up a new payroll item to track the health benefits deduction.
A payroll item needs to be assigned to an account. The type of account depends on the type of payroll item. If the type is Income, you may need and expense account, such as salary expense. If the type is a deduction, you may need a liability account, such as employee loan.