Worker's Comp

[Re2112]

Does anyone have any suggestions on how to track worker's compensation insurance as a cost or liability on a job so it will show up on a profit and loss statement on the job? Right now I am using Excel to calculate every job for every employee by every class. After I calculate the entire month, I manually enter in the amount of comp on an Item reciept/Bill for my Worker's Comp. and and post the correct amount to the job. I tried to enter the worker's comp. mulitplier for the appropriate classification in the paycheck/payroll window but quickbooks pro 2001 will not differentrate between classes.

[Quicky]

A profit loss report is only going to show income and expense.......I think the way you are doing it is only way.
If anyone has a work around please let us know as this would be very usefull tool.

[SunSoft]

First thing to do is create a list of your WC Employee Classification Codes
9898 Supervisor
5028 Masonry > $18.00
5027 Masonry < $17.99
9891 Office

Add to your Chart of Accounts, a Liability Account (I've made this a sub-account of my Payroll Liabilities) called Worker's Comp Payable and if you use subaccounts for Cost of Goods Sold, create a subaccount under Labor for Workers' Comp Costs.

Once you have created the list, added the 2 new accounts to your Chart of Accounts, you will create a Company paid payroll item for each one as follows:
Creating a Worker's Compensation Experience Rate:
Ø From the Lists menu, choose Payroll Item List
Ø In the Payroll Item List window, select the Payroll Item button (located on the lower left) and choose New to enter a new payroll item
Ø In the Add New Payroll Item window, select Custom Setup, click Next
Ø In the Payroll Item Type window, select Company Contribution, click Next
Ø In the Name used in paychecks and payroll reports, type the name of your Workers? Comp item name (5027 MasLab WCC), check the box in front of Track Expenses by Job, click Next
Ø In the Agency for company-paid liability window:
o Enter name of agency to which liability is paid ? enter the name of your
WC carrier
o Enter the number that identifies you to agency ? your policy number
o Liability account ? enter 2240 Workers Comp Payable
o Expense account ? enter 5220 Workers? Compensation Costs
Ø When you are finished click Next
Ø In the Tax tracking type select none, as this does not have to be included in the employees gross or reported as wages. Click Next
Ø In the Taxes window, leave all items here unchecked because workers? comp company-paid costs are not taxed. Click Next
Ø In the Calculate based on quantity screen, check the box Based on Quantity, to multiply each employees gross wages by the percentage rate your insurance company charges you for the workers? compensation classification. Click Next
Ø In the Default rate and limit screen enter the percentage charge for this item (10% - be sure to enter the % sign) in the top box. There is no limit, so leave the other box empty. Click Finish

When you have created the payroll items, edit each employee record and pull in the appropriate payroll item. When you generate your paychecks you will enter the total gross wage and then QB will calculate the worker's comp.

If you have any additional questions, please email me.

Nancy

[Quicky]

So this will show up on a P & L ?

[SunSoft]

Absolutely - by adding the COGS account it will show on P&L, P&L by job etc.

[Re2112]

Thanks for the input but, I can't get it to differenciate between classes. I have some employees that work in up to six different classes. Quickbooks takes the gross wages and multiplies the multiplier for all wages. If an employee works masonary for 3 hours then cement work for 2 hours and then 1 hour of clerical, It will multiply the masonary, cement and clerical the total eight hours worked. I can't seem to get the classification filter working.

[SunSoft]

"I have some employees that work in up to six different classes"
You will need to set each of these *classes* up as a company paid WCC item as described above, pull each of them into the employee screen (and then the Preview paycheck screen when you run out of room)

"If an employee works masonary for 3 hours then cement work for 2 hours and then 1 hour of clerical"
you would need to take the gross for the 3 hours of masonry work and put that total in the Qty. section on the Preview Paycheck screen against the masonry wcc item, repeat for cement and clerical.

I've attached a screen shot of the Preview paycheck showing where the item is located it's in jpeg format.

[linny]

I like the suggestion of how to tract Worker's Comp. and having it appear on the P&L. However, my only glitz is how to calculate overtime wages. I'm not sure if WC are handled in the same manner as in the state that I'm in, but the "half" of time & half is not calculated in the WC formula. So, for me, calculating the gross wages would not give me the correct cost where an employee works overtime. I found that by exporting the payroll liabilities to Excel gives me the numbers I need to calculate the cost. Then I just do a Journal Entry at the end of the quarter. Now that I have those Chart of Account items suggested, I can JE it into there and have it appear in my P&L.