My company pays people in retail stores to push my product. We pay them a fee for this, how do I show this in my books - is this a selling expense or under contract salaries?
accounting for independent contractor fees & commissions
Answers
It can be both- I see two concepts here: Cost Center and Account:
If it is a selling expense, then would you not use your Sales Cost Center rather than Admin?
As to 'contract salaries' it may depend on whether you are paying a true W2 based salary or a 1099 payment that determines if it is a salary v a commission expense.
hope that helps
You may want to find out what your
I agree with Christie. Be sure to get their W9 and distribute 1099s year-end. Anyone we provide a 1099 for falls under our subcontractor account. We would consider it an expense rather than a salary since we are not paying payroll taxes on their reimbursement.
There is a thread on Proformative that has a lot of input on 1099 v W2 payments and the legal/
Lynn's comment above is very relevant to this issue.
I post these payments to contract labor under the product cost center. This type of expense is clearly a selling expense and clearly a contract expense; so your GL needs to be designed to track and report on both.
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Human Capital