I've spent literally hours and hours, over multiple days, throughout the last month, combing through approx. 1 bazillion comment threads on this topic, watching QBO support go round and round without ever just fixing the problem... sigh...
So here are the two options I've come up with so far.
Ex. Employee received a $500 direct deposit which includes $450 in wages and $50 in credit card tips.
Option 1. Split the transaction. From the bank account, find the transaction for the specific "Payroll Check," then instead of just clicking "Match," select Categorize and split the transaction.
Ex. from the Split Transaction screen:
- Paid To: enter employee as the payee
- 1st Category: select Crew Labor (or whatever your wages expense account is called) and enter $450
- 2nd Category: select Employee Tips Payable (or whatever your tips liability account is called) and enter $50
This allocates the appropriate amount to the expense account and decreases the liability account accordingly.
- OR -
Option 2. Create a journal entry after each payroll.
Ex. debit Employee Tips Payable liability $50 and credit Crew Labor $50.
This clears out the liability and reduces the expense for an accurate P&L.
Both options are tediously unnecessary considering this should be a quick fix on the tech side of things, in order for the platform to simply allow users to record tips properly... sigh again...
But in the meantime, these are the workarounds I've figured out.
Which one is more convenient / less annoying depends on whether you're looking at this at the same time you're categorizing banking transactions or after the fact when a journal entry might be quicker / easier.
Either way, it's pretty exasperating to basically have to go back and re-enter employee pay & tips, essentially duplicating tasks for no good reason. So I hope the deluge of complaints will eventually result in an actual QBO fix.
In fairness, this is the only glaringly tone-deaf issue I've encountered with the platform so far. Everything else has been pretty nifty. Just too bad I've wasted like a full week of my life trying to figure out this one little thing that just should work!!!!
