Setting up an hourly rate for Time Tracking in QuickBooks Online

I received a question from Mohammad who wanted to know how to set up an hourly rate in QuickBooks Online.

In this week’s video blog I walk through the steps to set up an hourly rate that can be used by yourself or your staff to record time against customers or clients, and then record time using the rate, and prepare an invoice to the customer for the hours recorded.

If you have any questions at all about getting this set up please don’t hesitate to reach out.


Hi, Kerry here from My Quick Bookkeeping. Mohammed asked about how to set up a rate per hour in QuickBooks. So what we’re going to do today is set up some different rates, for different people, record some time against them and then invoice them out to our client.

Here we are in the sample company, go to the tab where we can select products and services. So what we are going to do is we’re going to create a new service and it will be a service and—all right, hold on. Mohammed I’m not too sure what it is that you sell, but I guess we’ll just call it an hourly service. And we’re going to say, yes, for you sell it to your customers and you sell it for a $100 and we’re going to put it into—yep, into services. We’ll call it that, put it in services. If you have a different account wherever you want this to appear in profit & loss, it’s where you would put that to.

Now, you have the choice here of making that inclusive of tax or to add a tax to it. We’re going to put the HST as the default. All of these things can be changed later. So now, we’re going to save this one and make another one. And maybe we’ll  call this a—okay you to save a rate per hour. Let’s have a reduced rate; an assistant rate, how’s that? Let’s set up an assistant rate and we’ll make this one be $50, go to the services account. Let’s say that this one normally has HST as well. So we’ll know save and close this. I’m going to go up to our time tracking.

Now, we’re going to have to make sure that in the company settings we’re able to track the services against time that we billed. So we’re going to come here, account settings, then go to advanced. Now, if we scroll down here we have time tracking at a service field to time sheets and this is what we want to do. So we want to make sure we add this here. I always change this to Monday and save. We’re done with that. you can now pop up to time tracking. So here, we’ll select the name of the person who’s carrying out this service, doing the work. Let me say it’s Andrew. Andrew was doing this work for 100 and it is the hourly rate that we set up. Here it is, the hourly service, you can see it’s billed at $100. So let’se say you did five hours of providing hourly service, this is not very descriptive, but whatever it is that you’re doing, whatever you want to appear on the invoice. We’re going to save it. Oh, interesting! I’m going to change our customer, that one’s in Hong Kong dollars, so we’re going to give it to Benjamin. Okay, save in here.

So now we’re going to be billing out the assistant. We’ll say Celeste is our assistant and we’re going to charge this to Benjamin as well, so we don’t end up with that currency error. That’s something I wish they’d fix in QuickBooks. And this will be our assistant, right, and the assistant was there for five hours also; system with hourly service, whatever it is that you do and then we will save it.

I’ll create an invoice for Benjamin. Here we go and you’ll notice that we have the option to add this billable time right here. We’re going to add it all and here we have an invoice. So we have the hourly service—five hours at a $100 and the assistant rate five hours at $50; total bill of 750 and the HST has come on automatically. If for some reason this was a client you didn’t charge HST to order the service was for some reason not taxable, just simply change it here and then you can save and send the invoice to your customer.

If you have any questions who would like further help getting that set up, reach out.

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