My background is accounting, I used to work for CPA's, and did also did the accounting for a motocross company in CA. My husband and I now own and operate a mobile auto repair shop. I still do all the accounting, plus service writing, etc. He does the repairs.
It is not hard to change the account type from an expense to COGS, however, it should be something you discuss with your CPA. Usually most payroll expenses are included as expenses - wages to technicians can be COGS, the rest would be expenses (but that makes it difficult when looking at a P&L to determine total payroll expenses very quickly).
If there are prior year entries in your Payroll expense account, and you want to change it from this year forward, the best way to do it would be create a new account in COGS for your payroll, then create a Journal Entry for this year's payroll to reclass from expense to COGS, then use the new account going forward. If you just change the account from expense to COGS, it can mess with the numbers your CPA used for your tax return for prior years.
If there are no prior year entries for payroll, the account type should be able to be changed pretty easily, as explained here. https://community.intuit.com/articles/1145400-account-detail-types
Again, check with your CPA to determine what would be best for you.
