Hourly job cost for salaried employee

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#1
MLI  
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I have an engineering client (S corporation) that bills his clients using a job cost system. He bills his time at an hourly rate, but wants to pay himself as a salaried employee.

Does anybody have any experience for recording this in Quickbooks?

So for example, his job cost paycheck for a month might be 150 hours at his billing rate of $100 per hour or $15,000.

But his monthly salary for that same period is only $10,000. ($120,000 annual salary).

Would you simply reverse the job cost check with a journal entry? And then create a Paycheck based on his Salaried pay?

Any issues from taxing agencies accounting for this difference if audited?

Thanks
 

#2
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There are two ways to do this, at least. The first way is to use the QB time to create the salary check and then have one last line on the earnings tab to add or subtract salary to get to the $10,000.

The second way (and the way I do it in my own QB) is that the owner's time is tracked to an expense account called "Owner's Time Allocation". Every time tracking period (month, week, whatever), you enter a bill to record the time, and it's offset in full against the Owner's Time Allocation account. That way, the account shows as a $0 on the P&L but it shows on each job costing P&L.
 

#3
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Thanks MD!
 


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