Skip to main content

Get 50% OFF QuickBooks for 3 months*

Buy now
Switch to QuickBooks and 70% off for 3 Months
Talk to Sales: 877-683-3280
Hours
Mon - Fri, 5am - 6pm PST
Sat - Sun, 7am - 4pm PST
Product support & help
Need help signing in?
H
hlund
December 19, 2025
Question

Qualified OT tracking setup

  • December 19, 2025
  • 14 replies
  • 75 views

Did anyone have any issues with the Qualified OT tracking set up?  

    14 replies

    Show previous replies
    J
    Julie Doby
    January 12, 2026

    In all of the information I can find about setting up the new Qualified Overtime Tracking payroll item, no one addressed how to fill out the "default rate and time limit" section of the setup.  What rate do I enter here?  The 1.5% overtime rate which the FLSA requires if that is what we use in our state?

    L
    LollyNino_CQuickBooks Team
    QuickBooks Team
    January 12, 2026

    Hi Julie,

     

    Thank you for reaching out here in QuickBooks Community. I understand how confusing the setup process can feel, especially when some sections aren't clearly explained. Let me help clarify how to set it up.

     

    In the Default Rate and Time Limit setup section, enter 0.00 for both the default rate and limit. This is important because the employee’s qualified overtime rate is calculated manually when running payroll.

     

    If the employee’s regular overtime rate (OT) is time-and-a-half (1.5x), you'll have to divide that (found at the top of the paycheck under earnings) by three. The resulting number will be their half-time rate, which you'll enter in the qualified OT tracking item.

     

    On the other hand, if it's double-time, divide the regular OT rate by four. Once you have the calculation, enter the overtime hours worked next to the calculated rate. The number of hours in the qualified OT should match the regular OT under earnings.

     

    I hope this explanation helps you confidently complete the setup for your Qualified Overtime Tracking payroll item. If you have any additional questions or need help with other parts of your payroll setup, don’t hesitate to reach out. We’re always here to support you!

    S
    Sickler
    January 16, 2026

    Yes, I have an issue with the Qualified OT Tracking.  Thank goodness it is for 2026 and not 2025.  First, it is not a company contribution.  Second, it does not work or make sense.  Waiting for an update.  I do not understand why QB is making something difficult that should be easy.  If they read the IRS rules, it should have been setup to coincide with their rules.  If not, why do it at all this early?  Clearly, the 2026 W2's are going to be tweaked along this year.  QuickBooks already allows you to track overtime with hours and wages.  What is the problem.  This is just one more frustrating software issue.  Some people prefer the desktop version of Enterprise for business reasons.  The cloud version is not where it needs to be to accommodate various businesses. 

    K
    Keith8777
    January 21, 2026

    I am trying to process payroll - In single user.  I opted for QB to calculate my Qualified OT Automatically and it worked on one employee but not another.  What would cause this? 

    L
    LouiseG12QuickBooks Team
    QuickBooks Team
    January 21, 2026

    Hi there, Keith. This could be due to the employee's overtime setup.
     

    QuickBooks will only calculate overtime automatically if an overtime payroll item is assigned to the employee’s profile. Without this specific payroll item linked, QuickBooks cannot recognize or calculate the employee's overtime hours.
     

    To resolve this, open the employee’s profile and review their payroll setup. Check the list of assigned payroll items and confirm that an overtime pay item has been added. If it’s missing, add the appropriate overtime payroll item and ensure it is set up with the correct Qualified OT for standard rates (1.5x or 2x hourly rate).


    If you have additional questions, feel free to leave a comment below.

    S
    skcpa124
    February 28, 2026

    Qualified OT comes in my quickbooks reports under employer taxes

    is is correct

     

    D
    DON28572
    May 11, 2026

    When the Qualified overtime was upgraded on my Quick books it was entered as a liability. How do I change it. Also, when doing payroll some of my employees' deductions will not stay as to what I sat up.  I entered a uniform deduction, and I have to renter it every time I do Payroll. 

    JoesemM
    JoesemMQuickBooks Team
    QuickBooks Team
    May 12, 2026

    During the upgrade, the Qualified Overtime payroll item was likely set to a liability account by default to track amounts owed but not yet paid. To change it to an expense account, follow these steps:

     

    1. Go to the Lists menu and select Payroll Item List.
    2. Right-click the Qualified Overtime payroll item and select Edit Payroll Item.
    3. Click Next until you reach the screen labeled Agency for company-paid liability.
    4. Then, change from the Liability account to the appropriate Expenses account.
    5. Click Finish when you are done.

     

    Please note: When you change the account mapping for an existing payroll item, QuickBooks will display a pop-up window asking if you want to apply this change to historical transactions.

     

    After updating the account, review the employee's payroll information to ensure the item is assigned correctly. If necessary, add the payroll item to the employee’s record and save your changes.

     

    Here's how:

     

    1. Go to the Employees menu and select Employee Center.
    2. Double-click the employee’s name whose profile you want to edit.
    3. Go to the Payroll Info tab.
    4. Add the payroll item under Additional Earnings.
    5. Click OK to save the changes.

     

    If you have further questions, please reply below. We're here to help.

    Need QuickBooks guidance?
    Log in to access expert advice and community support instantly.
    Terms & ConditionsAccessibility statement