QuickBooks Payroll Time Tracking Explained

QuickBooks Payroll time tracking lets you capture employee work hours inside QuickBooks and use those hours directly in payroll runs, so you don’t have to re-enter time when you process paychecks. You enter hours per employee per pay period, either manually or through the mobile app, and QuickBooks calculates gross pay based on the pay rate and overtime rules you’ve set up. This article covers how the feature works, what it costs, how it compares to standalone time trackers, and the common pitfalls to avoid.

Formula

The calculator estimates your weekly payroll cost using:

Weekly payroll cost = number of employees × average hourly rate × average hours per employee per week

Where:

• Employees – number of people on your payroll (unit: count)
• Average hourly rate – mean hourly wage across all employees (unit: $/hour)
• Average hours per employee per week – typical weekly hours per person (unit: hours)

The monthly estimate multiplies the weekly figure by 52 weeks and divides by 12 months. This is a rough planning number; actual payroll includes taxes, benefits, and overtime premiums.

Worked Example

Using the default values: 10 employees, $25/hour average rate, 40 hours per week per employee.

1. Weekly payroll cost = 10 × 25 × 40 = $10,000.00
2. Monthly estimate = 10,000 × 52 / 12 = $43,333.33

The calculator shows $10,000.00 as the weekly cost and $43,333.33 as the monthly estimate. This matches the formula output.

How QuickBooks Payroll Time Tracking Works

QuickBooks offers two main ways to track time: the built-in time tracking feature and the separate QuickBooks Time app (formerly TSheets). The built-in feature is available in QuickBooks Online Payroll (Core, Premium, and Elite) and QuickBooks Desktop Payroll. Employees can enter their own hours using the QuickBooks Workforce mobile app or the employee portal, and managers can also enter time on their behalf. When you run payroll, the hours automatically populate the payroll screen, and you can review or adjust them before submitting.

QuickBooks Time is a more advanced add-on that includes GPS tracking, job costing, shift scheduling, and overtime alerts. It integrates with QuickBooks Payroll so that approved time sheets flow into payroll without manual entry. The built-in tracker is simpler and free with most payroll subscriptions, while QuickBooks Time is an extra cost.

What You Get with Each Plan

QuickBooks Payroll plans differ in what time tracking features they include:

• Core – basic time tracking via the Workforce app; employees can clock in/out and enter hours.
• Premium – adds same-day direct deposit and faster payroll, but time tracking features are the same as Core.
• Elite – includes QuickBooks Time Premium for up to 20 employees (or 50 with the highest tier).
• Desktop Payroll – includes time tracking on the desktop app, but it’s less mobile-friendly.

If you need GPS tracking, geofencing, or project-based time tracking, you’ll likely need QuickBooks Time, which starts at a per-person monthly fee (about $8–$20 per user, depending on plan and billing cycle). The built-in tracker is free but lacks those advanced features.

How to Set Up Time Tracking in QuickBooks Online

To enable the built-in feature:

1. Go to Payroll > Employees > Time Tracking.
2. Click Turn on Time Tracking (if not already active).
3. Choose whether employees will enter time via the Workforce app or if you’ll enter it manually.
4. Set up pay schedules and overtime rules (e.g., daily overtime after 8 hours, weekly after 40).
5. Invite employees to download the Workforce app or access the employee portal.

Once enabled, employees log hours and submit them for approval. You approve the time sheet, and it appears in the next payroll run.

Common Problems and How to Avoid Them

Users often run into these issues:

• Overtime miscalculations – QuickBooks uses your state’s overtime rules by default, but you can override them. Double-check the overtime settings before running payroll.
• Duplicate entries – If an employee enters time and you also enter the same hours manually, you’ll pay twice. Always use one method per pay period.
• Missing time – Employees forget to clock out or enter hours. Set reminders in the Workforce app.
• Rounding errors – QuickBooks rounds time to the nearest 15 minutes by default. You can change to 1-minute or 6-minute increments in settings.
• Integration delays – With QuickBooks Time, approved time sheets may take a few minutes to sync. Check the sync status before running payroll.

QuickBooks Time vs. Built-in Tracking

If you’re deciding between the two, consider:

• Built-in – free, simple, good for small teams with basic needs. No GPS, no scheduling, no job costing.
• QuickBooks Time – costs extra, but offers GPS, geofencing, shift scheduling, and project tracking. Ideal for field teams, construction, or businesses that bill by the hour.

For a small office with 5–10 employees, the built-in tracker is usually sufficient. For a mobile workforce or if you need to track time against specific jobs, QuickBooks Time is worth the cost.

Costs and Limitations

The built-in time tracking is included with all QuickBooks Payroll plans, so there’s no extra fee. QuickBooks Time starts at around $8 per user per month when billed annually, or $10 month-to-month, plus a base fee for the first user. Payroll plans themselves range from roughly $45 to $125 per month, plus $5–$8 per employee per month. The calculator above gives you a rough payroll cost, but note that it doesn’t include employer taxes, workers’ comp, or benefits.

Alternatives to QuickBooks Time Tracking

If QuickBooks doesn’t fit, consider these standalone options (most integrate with QuickBooks via export or API):

• Deputy – strong scheduling and time clock features.
• Homebase – popular for hourly teams, free plan available.
• Clockify – free unlimited time tracking, but payroll integration may require manual export.
• Buddy Punch – simple time clock with GPS and webcam punch options.
• Excel/Google Sheets – manual tracking is free but error-prone.

These tools can export CSV files that you can import into QuickBooks, but that adds an extra step. If you already use QuickBooks Payroll, the built-in tracking is the most seamless option.

Frequently Asked Questions

Do I have to pay extra for time tracking in QuickBooks Payroll?
No, the basic time tracking feature is included free with all QuickBooks Payroll plans (Core, Premium, Elite, and Desktop). You only pay extra if you add QuickBooks Time, which is a separate subscription.

Can employees clock in from their phones?
Yes, with the built-in feature, employees can use the QuickBooks Workforce mobile app (iOS/Android) to clock in and out. QuickBooks Time also has a mobile app with GPS tracking.

Does QuickBooks automatically calculate overtime?
Yes, QuickBooks applies your state’s overtime rules and your company’s overtime settings (e.g., after 8 hours/day or 40 hours/week). You can adjust these in payroll settings.

Can I track time for salaried employees?
Yes, you can track hours for salaried employees, but their pay won’t change unless you set up overtime or additional pay. Time tracking is mainly useful for hourly workers.

What happens if an employee forgets to clock out?
You can manually edit the time entry in QuickBooks before running payroll. The employee can also correct it in the app if you allow edits.

Does QuickBooks Time integrate with QuickBooks Desktop?
Yes, QuickBooks Time integrates with QuickBooks Desktop Pro, Premier, and Enterprise, as well as QuickBooks Online. You may need to install a sync adapter.

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sel plan | Plan | Online Payroll Core=1, Online Payroll Premium=2, Desktop Payroll=3
in emp | Employees | - | 10 | 1
in rate | Avg hourly rate | $ | 25 | 0
in hrs | Avg hours/employee/week | h | 40 | 0
out weekly | Weekly payroll cost | $ | emp * rate * hrs | 2
out monthly | Monthly payroll cost (est) | $ | emp * rate * hrs * 52 / 12 | 2