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Aaron at LTJ
Level 1

Labor costing

Do I need QB Time and/or Payroll to be able to apply hourly costing to an employee and see that cost pull through on job profitability reports?


QB Desktop pro plus 2022

12 Comments 12
QuickBooks Team

Labor costing

I'm here to help track your employee's hourly cost, @Aaron at LTJ.


You don't need to have QuickBooks Time or Payroll services to track your employee's hourly costs. You can utilize the Time Tracking feature to record an hourly cost. Let me guide you through the process.


Firstly, let's turn on the Time Tracking feature in your company file. Here's how:


  1. Open your QuickBooks Desktop company file.
  2. Go to the Edit menu, then select Preferences.
  3. Click Time & Expenses from the left menu.
  4. Go to the Company Preferences section and select Yes to turn on the feature.
  5. Select OK to save the settings.


Once done, you can now enter a weekly or a single timesheet to track your employee's hourly cost. To do so, please follow the steps below:


  1. Go to the Employees menu, then select Enter Time.
  2. Choose Use Weekly Timesheet or Time/Enter Single Activity.
  3. Enter the information needed.
  4. Click Save & Close.


After the steps, the information will show on your job profitability report. 


You might also want to read this article to learn more about job costing in QuickBooks Desktop: Track job costs.


Please let me know if you need clarification about labor costing. I'll be standing by for your response, @Aaron at LTJ.

Aaron at LTJ
Level 1

Labor costing



We have done everything mentioned and no labor cost are pulled through to the "actual" column. Cost for job related expenses comes through for PO's that were put on the job. We also don't see a location to enter an hourly cost for each employee to calculate labor cost from, it looks to me that we would need to have payroll turned on to enter a compensation cost for the employee or another means from QB Time. QB Online seems to have this configured considerably different and better for job costing purposes.


We have read that thread thoroughly and under stand a time sheet is a non posting transaction but we get confused by this note

"Timesheets are a non-posting entry. You must import time to a bill or invoice to include it in the Job Profitability or Company Financial Reports.". 

We don't understand what they mean to "import" time, when creating an invoice we select the job we are invoicing and pull expenses and time through to the invoice by either the pop up window or the "add time/cost" button. Which I would believe we are "importing" to the invoice this way.


It would be nice to pull a report showing all labor hours and material cost that was applied to each job.. don't know if I've found that yet as the "quick report" in the job doesn't pull hours through just cost.

QuickBooks Team

Labor costing

Thanks for getting back to this thread, @Aaron at LTJ. Allow me to clarify things for you.


As mentioned by my colleague above, you can track your employee's hourly costs without having QuickBooks Time or Payroll. Simply use the Time Tracking feature to record an hourly cost. 


With regards to the statement about importing time, it means associating it to a bill or invoice to include in the Job Profitability or Company Financial Reports.


If you wish to pull a report showing all labor hours and material cost that was applied to each job, you may generate two reports, export them to Excel. From there, you can manipulate and condense them into one. For more info on how to generate reports in QuickBooks, feel free to check out this article: Understand reports.


You'll want to save your current customization. Feel free to read this article for the details: Memorize a report.


Keep me posted if you have additional questions about running reports in QuickBooks. I'll be around to help.

Aaron at LTJ
Level 1

Labor costing

I follow the steps to setup time tracking and when I double click on the employee I do not see a "Payroll Info" tab. My options are " Personal , Address & Contact, Additional Info, Compensation, Employment info". Everything is greyed out under compensation. Back in the employee center in the top right there is a hyperlink to turn on payroll, that's why I believe I need to turn on payroll feature to get this function. Please advise. 

Aaron at LTJ
Level 1

Labor costing

Any update on this?

QuickBooks Team

Labor costing

I appreciate you coming back into this thread, @Aaron at LTJ. Let’s work together to figure out what’s happening with your account. 


You don't need QuickBooks Time or Payroll to keep track of your employees' hourly costs, as my colleague noted above. You can enter an hourly cost using the Time Tracking tool.


There are a few things that could cause the payroll info option to be missing, but don’t worry we will get to the bottom of it. I’ve replicated your concern on my file and verified that the payroll info button is visible and working fine.


The unusual behavior that you've encountered might be caused by a damaged component in the program. To fix this, let’s perform some troubleshooting steps. Let’s start with ensuring you’re using the most recent version of your QuickBooks product. This way, you’ll receive security updates and bug fixes.


You’ll need to be an admin to update QuickBooks Desktop. You can also set up QuickBooks to automatically download the updates. I’ll show you how:


  1. Go to the Help menu, select Update QuickBooks.
  2. On the Update QuickBooks window, go to the Options tab.
  3. If you want to turn on Automatic Updates, select the radio button for Yes.
  4. To share automatic downloads with other computers on your network, select the radio button for Yes.
  5. Select Mark All, then click Save.
  6. Head to the Update Now tab. You also tick the Reset Update checkbox to clear all previous update downloads.
  7. Click Get Updates to start the download.
  8. When the download finishes, restart QuickBooks Desktop.
  9. When prompted, accept the option to install the new release.


Once done, you’ll need to reopen your QuickBooks file and run the payroll tax table update.


if the issue persists, we can run the Verify/Rebuild tool utility to detect the data damage: Verify and Rebuild Data in QuickBooks Desktop.


Drop me a response below if there are other things you need help with the time tracking or any other QuickBooks-related concerns. Take care, and keep safe.

Aaron at LTJ
Level 1

Labor costing



I have done all of these suggested steps and does not seem to be helping with the issue. I was not able to update the payroll tax table as we do not have payroll with QB, we use an outside source and import into QB. Please advise next steps?

Tori B
QuickBooks Team

Labor costing

Good morning, @Aaron at LTJ


Thanks for taking the time to get back with us. 


Running the Payroll updates aren't necessary since you're using a payroll service outside of QuickBooks. As my colleagues have mentioned above, you won't need QuickBooks Time nor Payroll in order to track your employees hourly costs. 


Since the steps above aren't working for you, I recommend contacting our Technical Support Team. This way, one of our tech support agents can review your account in a secure environment and investigate this matter further. You can use the link I've included below to connect with an agent. 



Please let me know if you have any questions or concerns. I'm always here to lend a hand. Take care! 

Aaron at LTJ
Level 1

Labor costing

I spoke with Tech and went through all the data rebuilding and updates, they are telling me I DO need payroll to have this functionality. 3 Different people in this thread have claimed other wise, is there anyone here willing to direct message and see who is correct?

QuickBooks Team

Labor costing

Thank you for coming back, Aaron at LTJ. I'm here to shed some light and to clear up some of the confusions.


Our Support Team is right, you'd need to have the payroll activated to track the employees labor costs.


Once you have the payroll functionality, you'll be to enter employees' timesheets and make sure the hours are billable to customers/jobs. Here's an article for more details: Get started with QuickBooks Desktop Payroll.


I'm also adding this link to give you the idea on how to create and run payroll in QuickBooks Desktop,


I'll be around if you still need assistance with anything. Just drop your comments below. Have a wonderful day!                                      

Aaron at LTJ
Level 1

Labor costing

Hey Archie,


Since we have an outside payroll service I don't feel it necessary to pay for QB Payroll just to utilize its labor costing feature. So I tried utilizing manual payroll and ran a serious of test to get cost to pull through that way and still cannot get it to function. Do I need a paid version to get this to work? The Payroll info tab did show in the employee center and I followed all suggested steps as before.


Labor costing

Allow me to jump in and help with your questions about tracking labor costs without a payroll subscription, Aaron. 


You can track time entries and associate them to a job without a payroll function. This is the reason why previous responses indicates that you don't need a payroll subscription to enter the employee's work hours.


Please note that time entries are non-posting transactions and will not show up in costing reports. Because of this, you'll need to associate a payroll item in the timesheet and use it in a paycheck. This is the only way to post the labor under cost under the Act Cost column.


You mentioned that already activated the Manual Payroll feature. This means that you don't need to have the paid version to be able to track labor costs.  You just need to follow these steps to use the time data to create paychecks:


  1. Go to the Employees menu and double-click on the name of the employee. 
  2. Proceed to the Payroll Info tab check the box for Use time data to create paychecks.
  3. Select OK.


use time data.PNG


Once done, edit the time entries and select a payroll item under the Payroll Item column. Let me show you how:


  1. Go back to the Employees menu and select Use Weekly Timesheet under Enter Time.
  2. Click the drop-down list under the Payroll Item column, then click Add new.
  3. Choose Hourly Wages and select Regular Pay.
  4. Follow the succeeding steps on how to create the payroll item. 



After that, create a paycheck to pay the employee for the tracked hours. Let me share these final steps with you:


  1. Select Pay Employees under the Employees menu.
  2. Make sure the date in the Pay Period Ends is the last date of the week in your timesheet entries. This is to include all tracked hours in the paycheck.
  3. Check the name of the employee and click Open Paycheck Detail.
  4. The number of hours and the payroll item will automatically show up.
  5. Choose Save and close, click Continue, and then select Create paychecks.


Then, open the profitability report and check if the amount is already showing up under the Act Cost column. 


Adding these articles as well for more guidance when using this feature:



Please keep me posted if that resolves your question about tracking labor costing. I'll keep an eye on this thread as well in case you have follow-up questions. 

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