Tracking labor costs

Thanks for providing us with in-depth details of your concern, Krisabitz. 

We'll need to enter hourly cost rates for each employee. If you use QuickBooks Online (QBO) Payroll, you can just use your payroll expenses to see your labor costs. However, you won't see the costs in projects until after payroll is processed. If you want to estimate your labor costs between payroll runs or if you don’t have payroll, just use estimated hourly costs.

To estimate your fully-burdened hourly cost for each employee, enter employee wages, and other costs like taxes and workers' comp insurance, as an hourly cost rate. Then apply these rates to estimate your labor costs. Here’s how to set up hourly costs:

1. Tap the Projects menu.
2. Select Hourly cost rate. This opens the hourly cost rate window.
3. Find the employee and select Add or edit an employee's rate, then tap the pencil icon.
4. Select the calculator icon to open the hourly cost rate calculator.
5. Add your employee's hourly wage and employer taxes. If your employee is hourly, QuickBooks fills in their hourly wage and employer taxes for you. If your employee is salaried, enter an hourly rate by dividing their annual wage (including employer taxes) by the number of weeks in a year. Then divide by the average hours worked per week.
6. Enter any additional employer taxes, workers' comp, or overhead for even more accurate hourly costs.
7. Tick Add to close the calculator.
8. Press Save to save the hourly cost rate for the employee.
9. Repeat for each employee. Then select Done to close the hourly cost rates window.

To view your labor costs, just switch between viewing payroll expenses or hourly costs. Let me show you how: 

1. Go to the Projects menu.
2. Find and select the project you want to view.
3. Select the Payroll Expenses or Hourly Costs drop down.
4. Choose the one you want to view. Changing this setting in one project will affect all projects.

If time charges aren't calculating as you expect in your project, check this switch to see if you're using your preferred type of labor cost (hourly costs or payroll expenses). To learn more about Projects, check out these articles:

• Set up and create projects in QuickBooks Online
• Track hourly labor costs and profitability by project in QuickBooks Online

I'd like to know how you get on after trying the steps as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Have a great day ahead. 

Hi - Thank you for your time.  I do not need to estimate labor costs.   I would just like to see the labor costs associated with a project after I have run payroll each week.  When I am in my specific project I am using 'Payroll Expenses' instead of 'Hourly Costs', however I still can't find my labor costs anywhere?  Here is a screen shot

Hello - 

Thanks for your help.  I do not need to estimate labor costs, just track them after payroll has been run.  I went into my specific project and I am using 'payroll expenses' as you suggested, but I still cannot see my labor costs for this project?  Is there another setting I need to modify to pull in the payroll for this project?  I am trying to attach a screen shot....

I appreciate your for going through the steps above and for sharing a screenshot with us, Kris.

Allow me to chime in and provide additional details on how to view your project labor cost. 

You'll want to change the view to the Hourly Costs of your project and select your employee in the HOURLY TIME COST field. This way, you'll be able to pull up the Time cost by employee or vendor report and view their labor cost. Let me show you how:

1. Go to the Projects menu in your QuickBooks Online (QBO) account.
2. Select the project you want to view.
3. Click the Payroll Expenses or Hourly Costs drop-down and choose the Hourly Costs.
4. Select your employee name from the HOURLY TIME COST section to open the Time cost by employee report. 

You can also utilize this link for more details: Track hourly labor costs and profitability by project in QuickBooks Online.

Once you're all set, you might want to modify the report to view the specific data you need. To be guided, you can refer to this article for the detailed steps: Customize reports in QuickBooks Online.

You can always count on me if you need more help supervising your projects and employee labor cost. Just add the details in your reply and I'll take care of it for you. Keep safe!

Hi - Thanks for getting back to me so quick.  I don't think I can use 'Hourly costs' because I have employees who make different pay rates depending on what job they are doing.  For example, an employee might do welding for 4 hours at $30 per hour and then on the same day operate equipment which pays $25 per hours.  I have figured out how to enter this in the weekly timesheet and assign the hours to the correct project.  Is there a way for the project to pull in this payroll information?  thanks.

I can see how the benefit of being able to able to track employee labor (different pay rates) to a specific project would aid you in running the business with QuickBooks Online (QBO), @Krisabitz. That's why I'm here to share a few details about this.

For the time being, pulling up different employee pay rates depending on what job they do on a project isn't an option. However, you can either run Hourly Time Cost per employee or Payroll Expense by project reports to get the data you need.

We take customer suggestions as opportunities to improve the various features within our products. Therefore, I would encourage you to send suggestions or product recommendations.

Your valuable feedback will be forwarded and reviewed by our Product Development team to help improve your experience while using the program. Here's how:

1. Go to the Gear icon.
2. Select Feedback.
3. Type in your recommendation in the Share your feedback field.
4. Click Next.
5. Follow the on-screen instructions to complete the process.

I've attached screenshots below that show the first four steps.

Then, I'd recommend customizing your project reports to focus on the details that matter to you the most. 

In keeping with this, I'm also adding this article to learn more about using projects to track your labor costs and profitability in QBO: Track hourly labor costs and profitability by project in QuickBooks Online.

I'm all ears if you have other concerns about creating and customizing invoices in QBO. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success, @Krisabitz.

Thanks.  How do I run the 'payroll expense by project' report that you mentioned?

When I am inside Projects and go to Hourly Cost rate and want to add the rate for an employee, there is no little calculator that pops up to help me calculate this.  If QB Payroll know how much the employees get paid per hour (and related taxes), shouldn't it auto-populate the hourly cost rate?

I'll share insights about employee hourly rates in managing projects in QuickBooks Online (QBO), @cambita.

QuickBooks will get your employee's rates based on your employee payroll setup. Moreover, you can add overhead, including worker's compensation depending on your current project, to the total hourly internal cost. Know that changes from here won't affect the original hourly setup on your payroll. If there's no cost shown on your projects, let's ensure to add them to your employee's employment details:

1. Go to the Payroll menu and select Employees.
2. Locate and tap the employee who's part of your projects to make changes.
3. In the Employment details section, click Edit to start amending.
4. Scroll down to the Cost rate (per hour) field and enter the corresponding value.
5. After that, click Save.

If it's still unavailable in managing your transaction cost labor, I recommend performing troubleshooting steps that help address unusual behavior on a cloud-based application like QBO. We can begin by accessing your company file using a private window. A private window is a helpful tool for troubleshooting browser-related difficulties, as it won't preserve any history. The following are the keyboard shortcuts:

• Google Chrome: press Ctrl + Shift + N
• Mozilla Firefox: press Ctrl + Shift + P
• Safari: press Command + Shift + N

Once done, we clear your browser's cache or cookies to avoid similar issues in the future. Alternatively, opting for one of the browsers that are supported can also be a wise decision.

Concerning the calculator icon that aids the need to calculate and add your employee's hourly rate, this has been removed in the recent updates as QuickBooks will now auto-populate the cost of rates for the employee.

Learn more about Tracking hourly labor costs and profitability by visiting this article: Track hourly labor costs and profitability by project in QuickBooks Online.

Moreover, you can utilize various financial reports to get a snapshot of your business's financial growth. I also added a resource where you can refer to the complete guidelines for customizing it:

• Run reports in QuickBooks Online
• Customize reports in QuickBooks Online

I’ll keep this thread open for your concerns and other queries about projects or any QuickBooks-related matters. I’m just a post away to guide you. Have a good one!

Thanks!  I have actually already amended the two employees’ hourly pay rate after their raise and run the first payroll at that new amount. But when I go into projects, and then hourly cost rate, there is no change. For two employees, the hourly cost rate is actually listed as zero. So it is not auto populating as it should. 

I think I’m going to have to call customer support (which I really hate to do because it takes forever) because I recently cleared the cache as I’ve had a recurring problem with the customer email not auto populating when I create a new invoice. So I’m not sure what’s going on…