Oh QB will fix it...and then charge you another gazillion dollars to your payroll subscription.  

What would correct liability and expense account be?

Hello there, @SD075.

Since this is purely a tracking item, we recommend selecting the same chart of accounts account in the Agency for the company-paid liability screen. This ensures that there is no impact on your chart of accounts. For instance, you can use the Payroll Liabilities account for both the Liability account and the Expense account sections. 

That said, I suggest contacting your accountant for further guidance on setting this up.

If you have any other concerns, please click Reply.

I have the Qualified OT Tracking set up just as you have shown in your post. However, I have an uncommon dilemma. We have employees that on rare incidents they will get Overtime doing their hired role doing their regular duties for their employed position. They don't get Overtime for the hours they are serving as a volunteer firefighter. They do however, receive Overtime when they are doing Wildland assignments, HazMat Responses and/or HazMat Training for certification renewal that is paid under a Homeland Security Grant. Each of these different type of Overtime Pay has its own payroll item that is used when preparing payroll. My question for you is, how am I to set each of the different Overtime payroll items up to be tracked? Do I create a Qualified Overtime Tracking payroll item for type of Overtime Pay payroll item and have the liability account be the Payroll Liabilities: OT Tracking that has been created? I am stumped. Please assist me.

I tried that set up and it did not isolate just Overtime, it took the regular wages and added them to liabilities to be paid. 

I found a fantastic YouTube video that gives a much better explanation on how to set the Overtime tracking up than what Intuit (QuickBooks has provided). https://youtu.be/Zqn5KJgddMg  you should watch it.

Hey try watching this video and see if that will help you.

https://youtu.be/6Sclbp1lnvI?si=nM2qDDofmQ5X2oZZ

Hello there, BWright. 

Thank you for taking the initiative to resolve the overtime tracking setup and for sharing your insights. Your efforts show great dedication and will help other customers address similar concerns more easily.

If you have concerns with QuickBooks, you can notify us at any time.

I was able to set this up correctly based on the instructions in the YouTube video (a very heartfelt thank you to the user that posted that!) however like other posters, the calculation is incorrect. For example, one employee had 2 hours of overtime, the exempt/trackable 'half portion' is $17 per hour, and the qualified overtime amount calculated by QBDT was $42, it should have been $34.

Since this updated was just integrated into my QBDT payroll as of 1/31/26, do I need to go back to the two previously issued paychecks in 2026 and manually enter the Qualified OT in each employee's paycheck?

I just tried to edit the two previously issued paychecks in 2026 and I cannot as net pay is locked.

I finally just decided to make the QT payroll item inactive.  I can’t have numbers being printed on checks that are inaccurate and having to be explained as “Quickbooks is working out the bugs, just ignore it” -that doesn’t feel very reassuring to employees that their checks are being correctly calculated! I’m also not going to manually calculate and enter figures on each and every check. 

I feel much better  manually calculating it at year end and adding it to the W2 then-once and done!  Thankfully none of my clients have more than 25 employees though! Maybe QB will have the bugs completely worked out by 2027

Hi Shislop, I'm glad to hear that the YouTube video helped you get everything squared away, and I know how important it is to ensure your overtime calculations are accurate.

To ensure your overtime and tax calculations are precise, please make sure both your QuickBooks Desktop version and your tax tables are fully up to date.

Regarding the Net Pay Locked prompt, this typically indicates Payroll Error PS038, which occurs when paychecks get stuck during processing. You can resolve this by following Step 5 from this article: Resolve payroll error PS038.

Let us know if you need further assistance.

This set up does not make sense to me. It seems like I am paying double overtime Here is my case.

AA works 40 regular hours and 5 overtime hours. 

Regular Pay $20 x 40 =$800

Overtime Pay $30 x 5 =$150

Qualified OT $10 x 5=$50

This is what the help person told me to do?

That wasn't what the problem was....the problem is that my software just downloaded the Qualified Overtime Tracking payroll item within the update on January 30th. I have had two paychecks issued in the calendar year so far, but since the payroll has been processed, net pay is locked and I'm unable to add the Qualified Overtime Tracking payroll item to the two previously issued paychecks. How will this be calculated within QBDT Assisted Payroll for purposes of the 2026 W2?

Thanks for checking back with us, @shislop.

Since the net pay is locked and you're unable to add the Qualified Overtime Tracking payroll item to the two previously issued paychecks, you can apply it to the next paycheck instead. This won’t affect the net pay.

That's all there is to it. Please don't hesitate to let us know if you have any additional questions or concerns. Have a good one! 

Thank you. The calculation, as others have reported, seems to be off. Is this a known issue? 

For example, the employee has .12 hours of OT at $51/per hour. QBDT Assisted Payroll is calulating the Qualified OT Tracking amount to be $72.63. 

The Qualified OT Tracking amount calculated by the software should be $51*.12 = $6.12 / 3 = $2.04

Hi there, shislop.

Accurate overtime calculations are crucial, and we appreciate you taking the time to review the numbers. Let me provide clarifications on this.

The inconsistency you mentioned should have been resolved with the latest update to your software. However, since the issue persists despite the update, we recommend contacting our customer phone support team directly. They have specialized tools and resources that will enable them to thoroughly look out your setup and efficiently resolve the issue for you.

Here's how:

1. In your company file, go to the Help menu and select QuickBooks Desktop Help.
2. Click Contact Us, describe your issue, and select Continue.
3. Log in to your Intuit account. Enter the code sent to your email, choose your account, and proceed.
4. Then select Chat with Us to chat or Have Us Call You to speak with an agent.

For additional questions or concerns, you can leave a comment below.

You are just tracking the qualified overtime. You are not paying the employee more money you are just tracking the portion of qualified overtime. The employee's pay does not change; it does not affect the taxes either. Correct qualified overtime is $50.

In your scenario: Qualified OT Tracking Rate $10  Quantity 5hrs  = Qualified OT Tracking $50.

I have manually put in the QOT on the employees that earned overtime on this pay period. The Qualified Overtime showed up on their pay stubs.

Thank you for keeping us informed, BWright2.

I appreciate you manually adding the QOT for this pay period to ensure it appears on the employee pay stub. Your proactive approach and attention to detail play a key role in maintaining the accuracy of our processes, and your dedication is greatly valued.

Once again, thank you for taking the time to share your experience. If there’s anything further needed, please feel free to reply below.

When will QB desktop automate this feature? The new payroll items for QOT tracking either calculates all hours regular and OT or you have to manually enter which is an unacceptable chore. The new payroll item for QOT tracking is calculated by quantity, not by hours, so you have to do the math for every single employee as well. This is a joke!

This feature is designed to make tracking overtime easier and more efficient. Before using it, it’s important to ensure that both your QuickBooks Desktop (QBDT) and Payroll are updated to their latest versions. Keeping everything up to date ensures the feature runs smoothly.
 

Once turned on, the system will automatically calculate and track overtime, eliminating the need for manual input.
 

To enable the feature, follow these steps:
 

1. Head to the Edit menu and select Preferences.
2. Go to Payroll & Employees.
3. Click on the Company Preferences tab.
4. Find the Qualified OT section and select Yes (auto calculate).
    

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