When we are processing payroll, we don't have time to manually compute the Qualified Overtime Tracking for every employee we have. We are counting on Quick Books to take care of this for us; this is what we are paying Quick Books for. We know how to calculate the Qualified Overtime Tracking number that we can manually enter on each paycheck, it is the time it is taking away from other tasks. QB program needs to be doing this for us. 

So am I understanding correctly that even if we set up this Qualified OT Tracking item, we are still going to have to manually calculate and manually enter the amount on each paycheck? 

This is where I am getting confused. Is the correct answer the 135.00 or 115.00. I was thinking the correct answer should be the $115.00 from what I was understanding from the bill. Maybe I am missing something.

I don't think it actually calculates correctly if you set it up so that you chose for it to calculate on hours and use 1.5 as the rate  - 

example - employee works 42 hours. 2hrs are overtime. Their pay rate is $50.09 for straight time and $75.14 for OT. The rule calculates the OT hours at 0.5 (the Half of time and a half).

So that would be $50.09 * 0.5 = $25.05  (or $75.14 - $50.09 = $25.05).

$25.05 * 2hrs = $50.10 - this would be the Qualified OT Tracking amount that would be used - RIGHT?.

What is sounds like you are saying is that you set it up so that the rate is 1.5 * hours worked, which would calculate like this:

1.5 * 42 hrs = $63.00

SO should the total used for Qualified OT tracking be $50.10 or $63.00? 

Attached is what pops up when I start to run payroll. 

I don't think it actually calculates correctly if you set it up so that you chose for it to calculate on hours and use 1.5 as the rate  - 

example - employee works 42 hours. 2hrs are overtime. Their pay rate is $50.09 for straight time and $75.14 for OT. The rule calculates the OT hours at 0.5 (the Half of time and a half).

So that would be $50.09 * 0.5 = $25.05  (or $75.14 - $50.09 = $25.05).

$25.05 * 2hrs = $50.10 - this would be the Qualified OT Tracking amount that would be used - RIGHT?.

What is sounds like you are saying is that you set it up so that the rate is 1.5 * hours worked, which would calculate like this:

1.5 * 42 hrs = $63.00

SO should the total used for Qualified OT tracking be $50.10 or $63.00? 

Attached is what pops up when I start to run payroll. 

Yes, mine is off as well one was supposed to be $74.00 and is calculating at $72.00.  I have tried adjusting the the rate, but for the life of me I can figure out how it got to that number anyway I calculate it. 

It appears that way and if you direct labor (cost of goods sold) along with overhead labor it will only calculate one 

LMAO tell me about it:)  I have over 100 employees and pay weekly 

I am also running into it calculating even when someone doesn't have overtime.  And as I see you are also a contractor.  You can only do one, not your Cost of Goods Sold and overhead. 

INM1581 - 

I'm pretty sure it should be $115.00. (actually it should be $105.00 because $31.50 - $21.00 = $10.50 not $11.50) (or $21.00 * 0.5 = $10.50).

If you calculate like the attachment, which came from Quickbooks as a popup you would come up with $105.00. 

QB EXAMPLE: 

*Regular hourly rate: $20/hr

*Overtime hrs: 5hrs

*OT hourly rate: 1.5 x $20 = $30/hr

*Qualified OT rate: 0.5 x $20 = $10/hr (the "half" portion)

*Qualified OT amount: 5hrs x $10 = $50

If you did this example using the 1.5 x total hours you would come up with $67.50 (1.5 x 45 = $67.50) - which is not what the example says. SOOO - i think we're still at an impass and QB doesn't have a fix other than us manually entering the rate and OT hours ourselves. 

I left the Qualified OT set up like QB sat it up originally and just had to put the rate in manually and then the OT hrs.  Hopefully they will come out with a fix so that we can select for it to calculate on ONLY OT hrs or another way for it to calculate correctly, but right now it looks like its gonna be done manually! (unless I'm totally wrong about how this calculates) 

And is your payroll calculating even when there is no overtime??? 

Our CFO and I spent about 30 minutes on the phone with Oliver from QB Support.  We walked them (and Engineers in the background) through the Setup of the Qualified OT Tracking; the setup of that payroll item for each Employee and THEN ran an example, non-scheduled payroll for a single employee.

QB support was able to see that the Qualified OT Tracking actually multiples the TOTAL hours by 1.5 and then puts THAT "number"  (it's not dollars) in the "Company Summary" box.  For example, if the Employee worked 80 hours of REG pay and 10 hours of OT pay, QB is multiplying 90 hours worked by 1.5 and entering "135" in the Qualified OT Tracking line of the Company Summary.  It's just plain: Wrong. And, QB Support concurs.

For an employee making $20 per hour, the calculation should be:  80 hours at $20/hr = $1,600.00.  10 hours at $30/hr = $300.00.  Divide the $300.00 OT pay by 3 (if it's a 1.5x rate) = $100.00 is the Qualified OT Premium Deduction the employee will be able to take Off Gross W2 Wages in... 2027 when the 2026 Return is filed. 

Support said to be on the lookout for an update to fix this QB calculation  issue. The incorrect calculation has NOTHING to do with FLSA.  QB support, concurs with ALL of the above. 

I think I will just export the employees OT hours to an excel report at the end of year, format it to multiply by .333 and give that report to the employees just like I'm doing for 2025.   If it's required to be on the W-2, it still would be easier to override the W-2 one time at the end of the year and add it instead of manually calculating and entering on every single paycheck for every single employee, in my opinion.  Thanks again Quickbooks for a complicated fix in your expensive software.

I have two clients using Enterprise solutions 24.0. Both updated their program and now Qualified OT tracking is a payroll item as a Company Contribution. 

Following the setup as some people have suggested using the setting as calculate this on hours. It pulls all the hours if the rate of 1.5 is used and discloses this on the paystub but at 1.5 of the total hours. Playing with this a bit more, it only seems to pull all hours. I can put .5 in and it takes total hours and discloses 1/2 of the total hours. No dollar amount of the premium wage being paid is disclosed either. I'm seeing various references indicating that both eligible hours and eligible compensations are supposed to be disclosed. If I switch to premium hourly rate multiplied by the QOT, I only get total compensation. 

As others have mentioned, when you are dealing with a hundred employees that are getting paid weekly, employers this is cumbersome and time consuming to have to put in all these overrides. 

The correct answer is $50.10. Deduct the standard pay from the overtime total pay. The credit is 2 hrs X $25.05. The employee is already getting standard pay ($50.09) for the 2 hrs the overtime pay portion is $25.05. 

So that would be $50.09 * 0.5 = $25.05  (or $75.14 - $50.09 = $25.05).

$25.05 * 2hrs = $50.10 - this would be the Qualified OT Tracking amount that would be used - RIGHT?. CORRECT.

QB showed the equation more complicated than it needed to be.

The QB example is correct. You are only tracking the overtime portion. The overtime portion in this case is $10.00/hr extra.

                                           Overtime pay is: 5hrs x $30 =   $150.00

Deduct Standard Rate out of Overtime Pay: 5hrs x $20 = ($100.00)

                                                                Overtime Credit = $50.00 (5hrs x $10.)

Example: 45hrs worked in one week : 5 hrs of the total 45 hrs is overtime

                 45 hrs x $20 = $900.00       (40hrs x $20 = $800)         

                 5 hrs x $10 = $ 50.00          (5hrs x $30 = 5hrs x $20 + 5hrs x $10.) 

           Total:                   $ 950.00                         = $950.00     

QB EXAMPLE: 

*Regular hourly rate: $20/hr

*Overtime hrs: 5hrs

*OT hourly rate: 1.5 x $20 = $30/hr

*Qualified OT rate: 0.5 x $20 = $10/hr (the "half" portion)

*Qualified OT amount: 5hrs x $10 = $50

An easier option:  OT pay = $150.00 

                                             $150.00 x .3333 = $49.99 Qualified OT   fraction cents are usually acceptable

If I'm manually calculating I'm looking for the easiest, correct way to do it 

My Quick books Desktop pro 2024, automatically Downloaded the said category. And i made a paycheck to myself. I ran the Payroll Summary Report. The 1/3 amount of OT amount, shows under Employer taxes and Contributions. That is not Correct.

Now someone need to remember to subtract that QOT in order to get correct employer taxes. In oregon most companies uses the "Employer Taxes and Contributions" as COGS , to pay CAT (Corporate Activity Tx) . This will make one to do manual calculations (which someone can forget ), thus will be errors in CAT tax paying,, And at year end reconcilation will result in Penalties & Interest????

I have already talked to support and agent agreed the same 

I am in the same boat, keep in mind that this does not show on a paystub, just a tax return.  It shows in the bottom under Company Contribution and has no bearing on wages.  That being said, no need to calculate every payroll.  If you lock the net pay you can add to the correct w2 line by year end.  

Given the information below do no add the item to other additions and deductions employee payroll tab you will have to delete the rate on every check...Regardless of whether there is overtime:  I found the hard way

QB Engineers and tech support are aware there  not computing, they said they would be  Ian update to be downloaded when corrected.   However, no time frame.  keep in mind once corrected you can allow qb to calculate  as far back 01/01/2026.  

Yep I thought it worked was all excited, then I did the actual math not the "that makes sense math" it is off by a couple dollars everytime.  This is what qb is supposed to correcting with the next update they roll out.  

I was wondering the same exact thing and have spend 4 hours on the phone with them and have come up with no answers except for "wait for the next update roll out" smh.

I was wondering the same and have spend four hours on the phone with quickbooks "experts" just to be told that there will be an update "roll out" coming soon.  we shouldn't have a liability for this in our system. 

Use neither, and then leave the rest blank.

So are you saying in the setup the Liability Account should be set on Payroll Liabilities and the Expense Account should also be set on Payroll Liabilities?