Hi everyone,I'm experiencing some issues with billable hours and taxation, and I have a question about paying staff for these hours. Let me walk through what's happening: The Setup:Created a service in Products & Services: "Copywriting and Research" at $45/hour with HST ON 13% taxUsing Weekly Timesheet to log billable hours for employees through the +NEW buttonSelected: Customer, Service (Copywriting and Research), and Pay Type: Salary The Tax Bug (Workaround Included): 1. When selecting the service in Weekly Timesheet, the billable rate appears correctly, but the "Taxable" checkbox doesn't auto-check despite the service being set as HST ON 13%2. I manually check "Taxable" and save3. In Customers & Leads, the "Suggested Transactions" panel shows items correctly as "Taxable" ✓4. However, clicking "Add All" adds them to the invoice WITHOUT sales tax !!! I have to manually select HST ON 13% for each line item (there are many!!) This seems like a bug in how taxable hours are implemented - the tax settings aren't carrying through the workflow properly. My Main Question:Once I've invoiced the customer for these billable hours, how do I pay the staff member who logged them? They're already on regular payroll, and I want to pay them for these billable hours as additional compensation. Is there an easy/automated way to: Track which billable hours have been invoicedPay employees for those specific hours outside their regular salary Any insights on best practices for this workflow would be greatly appreciated! Thanks in advance!

We appreciate the detailed information you’ve provided and your effort to ensure your employees are compensated accurately, Circlical. Allow me to assist you further. To begin with, to ensure the tax is applied automatically, we'll need to check the Assign default tax code box in your customer's profile. Here's how: Go to Sales and select Customers.Locate and click on the customer to whom you want to apply the tax.Select Edit, which is located between Give Feedback and New Transaction.Scroll down to the Taxes section and tick the Assign default tax code.Hit Save. Once done, proceed to create an invoice for the customer to verify if the changes you've made have been applied. Additionally, for tracking billable hours, we'll need to manually create a Timesheet for the logged activities to easily monitor the billable hours. On top of that, to compensate your employees for the specific hours worked outside of their regular salary, we'll need to add an Additional pay type for that payment. If you still need further assistance, don't hesitate to leave a post below.

C

Circlical

Question

How to Pay Staff for Billable Hours Outside Regular Payroll? (Plus Tax Bug Report)

Forum|Forum|9 months ago
October 6, 2025
1 reply
5 views

Hi everyone,

I'm experiencing some issues with billable hours and taxation, and I have a question about paying staff for these hours. Let me walk through what's happening:

The Setup:

Created a service in Products & Services: "Copywriting and Research" at $45/hour with HST ON 13% tax
Using Weekly Timesheet to log billable hours for employees through the +NEW button
Selected: Customer, Service (Copywriting and Research), and Pay Type: Salary

The Tax Bug (Workaround Included):

1. When selecting the service in Weekly Timesheet, the billable rate appears correctly, but the "Taxable" checkbox doesn't auto-check despite the service being set as HST ON 13%
2. I manually check "Taxable" and save
3. In Customers & Leads, the "Suggested Transactions" panel shows items correctly as "Taxable" ✓
4. However, clicking "Add All" adds them to the invoice WITHOUT sales tax
!!! I have to manually select HST ON 13% for each line item (there are many!!)

This seems like a bug in how taxable hours are implemented - the tax settings aren't carrying through the workflow properly.

My Main Question:

Once I've invoiced the customer for these billable hours, how do I pay the staff member who logged them? They're already on regular payroll, and I want to pay them for these billable hours as additional compensation. Is there an easy/automated way to:

Track which billable hours have been invoiced
Pay employees for those specific hours outside their regular salary

Any insights on best practices for this workflow would be greatly appreciated!

Thanks in advance!

QuickBooks Online

J

Jovelyn_M

QuickBooks Team

We appreciate the detailed information you’ve provided and your effort to ensure your employees are compensated accurately, Circlical. Allow me to assist you further.

To begin with, to ensure the tax is applied automatically, we'll need to check the Assign default tax code box in your customer's profile.

Here's how:

Go to Sales and select Customers.
Locate and click on the customer to whom you want to apply the tax.
Select Edit, which is located between Give Feedback and New Transaction.
Scroll down to the Taxes section and tick the Assign default tax code.
Hit Save.

Once done, proceed to create an invoice for the customer to verify if the changes you've made have been applied.

Additionally, for tracking billable hours, we'll need to manually create a Timesheet for the logged activities to easily monitor the billable hours.

On top of that, to compensate your employees for the specific hours worked outside of their regular salary, we'll need to add an Additional pay type for that payment.

If you still need further assistance, don't hesitate to leave a post below.

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