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Set up and track payroll expenses by job in QuickBooks Desktop Payroll

by Intuit Updated 1 year ago

Learn how to set up job costs and track your payroll expenses by job in QuickBooks Payroll.

QuickBooks Desktop Payroll lets you track your payroll expenses by job. And in QuickBooks Online Payroll, you can also track hourly labor costs and profitability by project.

Step 1: Set up your QuickBooks preferences

set up job costing preferences in QuickBooks

  1. Go to Edit, then Preferences.
  2. Select Accounting, then Company Preferences.
  3. Make sure the Use class tracking for transactions is selected.
  4. Select Payroll & Employees, then Company Preferences.
  5. Select Job Costing, Class and Item tracking for paycheck expenses
  6. Select whether to track it by Entire paycheck or Earnings item.
  7. Select OK.

Step 2: Set up payroll items to track expenses by job

You can create a new payroll item or edit your addition, deduction or company contribution items to track expenses by job.

If you need to create a new payroll item:

  1. Go to Lists, then Payroll Item List.
  2. Select Payroll Item ▼ dropdown, then New.
  3. Select Custom Setup, then Next.
  4. Select Deduction, Addition, or Company Contribution, then Next.
  5. Enter the name of the item, then select Track Expenses by Job.
  6. Select the info as needed on each window, then Finish.

If you need to change or edit the payroll item: 

  1. Go to Lists, then Payroll Item List.
  2. Right-click the Payroll Item, then select Edit Payroll Item.
  3. Select Track Expenses by Job.
  4. Select Next until you can select Finish.
  5. Repeat for each payroll item that you want to track.

Step 3: Create and run payroll

As you create and run payroll, you’ll need to open your employees’ paycheck details. Select the job name from the Customer: job column in the Earnings item section and add the hours or pay.  Do this for each job the employee worked. In reports, amounts are divided based on division of jobs on paychecks.

Note: When Track Expenses by Job is turned on, it’ll only affect future transactions.

Run job costing reports

Run Job Reports if you need to view the payroll wages, taxes, deductions, and contributions by job. You can also use the same report to identify which job is profitable and which isn’t.

  1. Go to Reports, then Jobs, Time, & Mileage.
  2. Select Job Profitability Summary.
  3. Double-click the job amount to see the wages, taxes, deductions, and contributions on each job.
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