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Level 2


Hello everyone, i've been researching but haven't found an answer.


My business runs on 1099 contractors that get paid certain p/h rate.

I and the contractors provide professional services to my clients, also on p/h rates.

So i need to send invoices to our clients containing names of staff, hours worked and hourly rate we charge.

At the same time, i need to pay my contractors for the hours worked, but with a different rate than what we charged the client. Basically the difference covers the cost of business and my time on the project.


So issues i have when using QBO is when i create invoices for our clients, i am unable to list names of the contractors next to the hours and billing rate p/h per contractor. The only thing that comes up is hours and description when i try to setup invoice. i see an option to list employees and rates, but these folks are not employees. if i set everyone up as employee then 1099 preparation doesn't work.

At the same time i want to be able to pay the contractor for the hours they worked somewhat automagically. without me having to run a time report, multiply by their hourly rate and manually pay them the appropriate amount.


I found something online.... here but it says that its available only in  Contractor, Professional Services, and Accountant editions. I'm assuming that's desktop software for large corps?


8 Comments 8
QuickBooks Team


Let me share some ideas about invoicing in QuickBooks Online, @malahhaor.


When creating an invoice, there isn't an option to put the contractor's name. If you want to pay your contractors at a different rate, you can create a different service item for each contractor. This way, when you enter the timesheet, you can use their respective service item to charge the customer based on the rate. 


Here's how:

  1. At the left panel, choose the Sales menu and then choose the Products and services tab.
  2. Click New and select Service.
  3. Add a name, if you track SKUs, enter an SKU for the product.
  4. From the Category ▼ dropdown, choose the category that best defines your product or service. 
  5. In the Sales information section, enter a description. 
  6. Enter an amount in the Sales price/rate field. 
  7. Choose the Income account ▼ dropdown and the account you want to use to track the sale
  8. If you need to track sales tax, select Taxable - standard rate from the Sales tax category ▼ dropdown. 
  9. Once done, click Save and Close.

Now you can add the product and service to your invoices.


You can also track it on your financial reports.


Let me know if you need further assistance in recording invoices for your contractors. I'm always here to lend a helping hand. Keep safe and healthy. 

Level 2


Thank you for replying. I tried to follow but my menu doesn't have Sales. I did find Products and Services and added a name to the description. I also don't have Sales Tax category dropdown.

It seems like an easy option to have, include employee or contractor name on the invoice. Why would something like that not be available? 

If i go this route, and i have 10 contractors,  will I need to create 10 different product and services? one for each contractor just so i can invoice my customers?


Also as i mentioned, i need to be able to pay the contractors. how do i generate payments automatically based on their rate and time worked?

THanks much.




Hello there, malahhaor.


Aside from the suggestion on the earlier response, I can think of another, too. We can make the hours billable to the customer while we pay the contractor. However, this process has to be done manually.


First, we'll have to turn on the Markup option in the company settings. This would help us invoice the customers with different amounts:

  1. Click the Gear icon in the upper-right corner and select Account and settings.
  2. Select the Expenses tab and go to the Bills and expenses section.
  3. Turn on the Make expenses and items billable option.
  4. Turn on the Markup with a default rate of option. You can leave the % field blank if you want to.
  5. Click Save and Done.

Second, we'll create a Bill, Check, or Expense to the contractor and make it billable to the customer:

  1. Click the + New button and select Bill, Check, or Expense.
  2. Select the contractor name in the Payee/Vendor field.
  3. Enter the necessary details and go to the Item details section.
  4. Use the hours item and enter the contractor's name in the DESCRIPTION field.
  5. Make sure you mark the BILLABLE column and assign the CUSTOMER.
  6. Enter the MARKUP % and click Save and close.

Lastly, we'll create an invoice for the customer.

  1. Click the + New button and select Invoice.
  2. Enter the customer name and it will open the Add to Invoice drawer on the right side of the Invoice window.
  3. Click Add on the Billable expense.
  4. Enter other details if necessary and click Save and close.

Meanwhile, we have timesheet in QuickBooks Online where you can enter the hours worked. However, it might not work well for you since these hours will not show when you create bills, expenses, or checks. Here are some links that you can review about the feature:

Moreover, you might want to reach out to your accountant about this situation. They can give you other options that will surely suit your business setup and books. 


Let us know if you need anything else. Have a great day!

Level 2


Thank you very much for your help but i don't have most of the options available to me that you are describing. Perhaps my subscription doesn't have this available but based on what i'm finding, higher subscription level wont give me what i'm looking for either.

I think this is a wrong product for me.


Thank you for your time..



Eddie T
Level 1


Hi I have almost the same situation. We are a staffing company and we do payroll on a weekly basis, we take whatever we pay our employees and mark it up to our customers.


-Is there a way that use the payroll information from my employees and create an invoice to my clients?

- since we have a different markup for almost every client is there a way I can have a markup or fix amount by customer? 


- Also, a different issue we have aprox. 3K employees (Temp work) and because of that we were told that we should create separate entities because QB or Intut will not be able to create  quaterly 941 reports if it's over 800 employees. is this correct ? and can we go around this?



I'll share details to help with your concerns about billable expenses, Eddie.


For now, we're unable to mark up the payroll expenses in QuickBooks. This option is only available when creating checks, bills, and expense-type of transactions. 


Although, you can bill the hourly rate or pay of the employees using the Time Sheet feature. Check out these articles for more details: 



Also, there's no option to set or assign a mark up rate or amount per customer. You'll need to manually enter the rate or amount in the Markup column when creating billable expenses. 


With regards to processing quarterly forms, you may get an error message when creating Quarterly 941 Forms if you have that many employees. QuickBooks is primarily designed for small and medium businesses.


However, there are third-party apps that can help you file your tax forms outside of QuickBooks Online. You can find apps that can be synced with QBO here:


I would also recommend sending feedback or a feature request about this to our product engineers. Check out this article for more details: How Do I Submit Feedback?.


Additional references when using the payroll functions are also shared in these articles:



Don't' hesitate to add more questions if you need anything else. We'd be more than happy to help you again. 

Level 1


How do I get the employee name to show in the description on an invoice when I create an invoice from approved time batch?  Can you do time billing for Contractors?  I have set some samples as employees.....since all our workers are contractors I guess we can do 1099 separate from quickbooks if needed if that is the only way of keeping track of their time.  

QuickBooks Team


Welcome back to the QuickBooks Community, Beaglemom. I'll be providing an alternative way so you can get the employee name to show in the invoice's description. Then, ensure you can perform time billing for Contractors.


Getting the employee name automatically to show in the description on an invoice when you created the entry is currently unavailable. You'll have to manually enter the specific name on the said field to ensure the details are correctly entered.


Furthermore, I recommend making sure that you're able to mark and track 1099 in your QuickBooks Online to organize your contractors and payments so your filings are correct.


On the other hand, you can use the Bill, Check, and Expenses feature to do time billing for Contractors. All you have to perform is make sure you'll be able to click the Add in the upper right corner. Beforehand, ensure that you have already entered the total number of hours worked by your employee/contractors by creating a weekly timesheet in QBO.


Here's how Check:


  1. Go to the Plus icon and choose Check.
  2. Choose a specific payee the same as the chosen payee on the timesheet. 
  3. Bill to Add will appears. Then, click the Add link.
  4. Double check that the bill is marked as a check.
  5. Click Save and close.


Lastly, you may refer to this article to see information on how you can make corrections to the 1099-NEC or 1099-MISC forms after you have e-filed them: Correct or change 1099s in QuickBooks.


If you have other concerns about 1099, don’t hesitate to reply below. It’s always my pleasure to keep you on the right track, Beaglemom. Have a good day!

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