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    How to set up job costing and item tracking for payroll expenses

    Article ID: 1000796


    This article explains how to set up job costing and payroll item tracking so you can to track expenses by job.


    You have an active, up-to-date version of QuickBooks.

    Expected Outcome

    The assigned amounts show up in the Profit and Loss by Class report.


    When you follow these steps to set up your preferences, QuickBooks will automatically track expenses by job for company payroll expenses, such as employee wages from earnings items and employer taxes.

    If you would also like to track payroll expenses by job for Company Contributions, Additions, and Deduction type payroll items, you must edit the individual payroll items to select Track Expenses by Job for reports to populate properly. On paychecks, QuickBooks prorates additions, deduction and company contributions (company-paid taxes) by your jobs, classes, or service items using the ratios it derives from the way you split up earnings in the Earnings table. See the additional steps at the bottom of this article.

    Set up preferences to job cost and item track paycheck expenses:

    From the top menu bar, choose Edit > Preferences.

    From the list in the left pane select Accounting.

    Click on the Company Preferences tab.

    Make sure there is a checkmark in the Use class tracking box.
    Note: If this is not marked then the options to Assign one class per Entire paycheck or Earnings item will not not be available.

    Click the OK button.

    From the top menu bar, choose Edit > Preferences.

    From the list in the left pane select Payroll and Employees.

    Click the Company Preferences tab.

    Put a checkmark in the Job Costing, Class and Item tracking for paycheck expenses box and select whether to track by Entire Paycheck or Earnings Item.

    When you create or edit payroll items that are additions, deductions or company contributions, QuickBooks displays a checkbox called Track Expenses by Job in the Name used in paychecks and payroll reports window of the Payroll Item Setup wizard. If you select this box, QuickBooks prorates those items on employee paychecks the same way it does company-paid taxes. See the steps below for additional instructions.

    To select addition, deduction and company contribution items to track expenses by job:

    1. Choose Lists > Payroll Item List.
    2. Right-click the Payroll Item and select Edit Payroll Item.
    3. Select Track Expenses by Job.
      Note: It is important to follow the above steps to set up job costing preferences. If job costing is not set up in QuickBooks you will not see the option to Track Expenses by Job when you edit the payroll item.
    4. Click Next until you can click Finish.
    5. Repeat for each payroll item that you want to track.
    Marking Track Expenses By Job will not add a Customer:Job column to the payroll items listed under Other Payroll Items on a paycheck. Instead, in reports, these items are divided based on the division of the earnings items on the paycheck.
    Turning on Track Expenses by Job does not affect existing transactions.

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