Distributing payroll tax expense

You are not missing anything. QuickBooks payroll does NOT have the capability to assign the employer FICA to more than one expense account. Thus, if you must breakout the FICA to more than one account, you'll need to do it in Journal Entries, simply moving from the once expense account to the individual accounts. It is a pain. I have one client that re-assigns FICA to multiple expense accounts via monthly journal entries...using a monthly payroll report to determine payroll by expense account and then calculating FICA for the gross payroll per expense account. Good luck

Another nice feature you can use that is not available in Peachtree is the use of classes. It's very easy to use and you can print your expense report and it separates it all for you. If you want to email me directly, we can use AIM to walk you through it.

Is there any update on this issue? Does the 2009 version allow payroll taxes to be allocated to one than one g/l account?

For my administrative staff, I entered the company as a Customer and all admin time is assigned to this customer. It's all part of job costing, not GL accounting.

There is a trick to splitting employer taxes into two cost accounts. Create two new Payroll Items. (It's easier to do this via Custom setup than by using EZ setup.) One is an Deduction type of item called Remove tax from Exp. Account, mapped to the same payroll tax account your SS, Medicare, and other employer taxes are mapped to. No Need to change any of the other default settings. The other is an Addition type of item called Reallocate tax to COGS, mapped to the alternate cost account you want to use such as a COGS account. Be sure to select tax tracking type “None”. Add these to the employee's set up screen so they appear by default on the paycheck. When you process the paycheck, add up the amount of company tax that you want to reallocate and show it as a negative number for the Remove… item and as a positive amount for the Reallocate… item. This has no affect on the employee records, just moves the employer taxes into an alternate account.

You can do this using just one Payroll Item: a contribution instead of needing a deduction AND an addition. Set up a Company Contribution item that is set to calculate the amounts, such as "Reallocate SS" and give it the same rate and limits as the real item and make it nontaxable and calculates on gross wages. Link it to the original expense account instead of the liability account, and link it to the new expense account.