For this: "I can setup a "additional" payroll item to do this and it gives a box to select to track by job. However when an employee works some hours on a check that go to a job and some that do not it still allocates some of the per-diem total to the no job portion."
The Addition item doesn't have a place for you to Job Track it; it is allocating across all the Job Tracking and lack of Job Tracking from the top left Compensation section. You set it to Track by Job, but there is no field for you to then Allocate and Assign. Some are not going to jobs, because you have time not assigned to jobs. And if you wanted all per diem to only one or two specific jobs, but the Compensation items from the timesheet are allocated to more jobs than this, you didn't get a chance to do your own Direct Allocation. So, let's not use that method. Instead, you want to take Specific control.
Make a Bank account and name it Payroll Clearing.
Use that account to Write Check for that paydate to each employee. List your Per Diem item(s) on the Items tab, job track, and billable or not, using quantity, cost, etc.
Now the Clearing Bank is running negative and you entered every detail for what you owe to each employee name.
Make a Net Pay Addition item with None for tax tracking and it is for "Employee Accountable Plan additions," which will Not be job tracked. Link it Not to expense; link it to that Payroll Clearing Bank account. Use it on the paycheck for each employee, for the amount you owe them. This acts as a Transfer to the paycheck from the regular checking account (increasing the takehome), and is offsetting into the Payroll Clearing Bank, where it appears as a deposit or Refill of value.
If you did this right, Payroll Clearing for that paydate now ends at 0. And everything is there for Job reporting.
And this assumes the per diem allowances are under the terms of An Accountable Plan. If not, then the addition item needs to be Taxable as Fringe Benefit.
