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Level 1

OT hours Not transferring as OT billable when invoicing

When entering labor as billable and also as overtime for the employee, it comes out fine on the payroll side but when invoicing from "Time and Expenses" the hours come up as straight time not overtime. I'm told it used to work but now it doesn't.  Should a different labor item be used?

3 Comments 3
QuickBooks Team

OT hours Not transferring as OT billable when invoicing

Great to see you here @TreaseaLong. Yes, you can create a different wage item to have it reflected as billable.


Tracking Overtime hours in QBDT is currently unavailable. You'll have to manually input OT hours as a wage item for employees. 


To set up an OT wage item in QBDT, follow these steps:


  1. Go to the Lists menu, then select Payroll Item List.
  2. Click Payroll Item, then hit New.
  3. Select Custom Setup, then select Next.
  4. Click Wage, then press Next, then choose Hourly Wage.
  5. Pick the appropriate payment type. Enter a name for the pay item, then press Next.
  6. Choose the Expense account where you want to track wages.
  7. Click Finish.

You can follow the steps below to add this payroll item automatically to paychecks:


  1. Go to the Employees menu, then select Employee Center
  2. Double-click on the employee's name. 
  3. Tap the Payroll Info tab.
  4. Click on the blank area, in the Earnings box, below the Item Name column.
  5. From the drop-down menu, select your Hourly item.
  6. In the Hourly/Annual Rate column, enter the employee's hourly rate. 
  7. Select OK to save the changes.

I've got this article for additional information on this process: Set up an hourly wage payroll item


Additionally, with QuickBooks Desktop's job costing tools, you'll be able to see how much money you spend and make for each job. To accurately record your job cost, you can refer to this article for the complete details: Tracking job costs in QuickBooks Desktop.


If you have QuickBooks Time, you have the option to set up overtime tracking. Refer to this article for additional options: Configure and change advanced overtime settings in QuickBooks Time


Let me know in the comments below if you have other questions about overtime pay in QBDT. Take care always.

Level 1

OT hours Not transferring as OT billable when invoicing

I'm not sure I explained the problem accurately. I have no issues with payroll.  I have several payroll item types.  The problem is after I have entered time and indicated on the timesheet that it is billable AND the payroll item chosen is overtime, when I go to bill my customer the employees' time is only listed at regular time not overtime.  As this is specifically for a T&M job, I need the hours noted as OT at billing.  


OT hours Not transferring as OT billable when invoicing

Let me share details about overtime rates for billable hours, TreaseaLong.


The overtime rate will only be used automatically when creating paychecks. This is the reason why it's only giving you a flat rate when billing the client for the OT hours. 


For billable expense, you'll want to create a separate service item that will be specifically used for overtime hours. Here's how:


  1. Go to the List menu and select Item List.
  2. Press CTRL + N on your keyboard to create a new item.
  3. Select Service.
  4. Enter all details including the overtime rate that you'll be using when creating an invoice.
  5. Click OK.


Once done, use that service item in a separate line in the timesheet when recording the overtime hours. 




That should give you the correct OT rate when creating invoices. I'd also want to share these articles if you need more guidance about billing clients for the work that you've done:



Always ask questions or reach out to us again if you need anything else. We'll make sure that you get all the help that you need. 

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