I am a contractor, however one of my clients has me employed under a casual contract.The pay I receive from them has already been taxed. How do I record this transaction?

Welcome to the Community, lachlannoble-pt-!

If you are not using the payroll feature in QuickBooks Online to record your pay runs, you can create an Expense transaction or Journal Entry  and set to Out of Scope tax code. However, if you're trying to record a salary/wages paid from the Banking tab, you can allocate the it to Payroll Clearing or Wage expense account.

For your reference, you can also check on this article: Matching payroll payments in QuickBooks Online.

Feel free to drop a comment below if you have any other questions. Have a nice day!