QuickBooks Time Setup in QuickBooks Online: The Accepted Path

QuickBooks Online users who add QuickBooks Time to run hourly payroll tend to hit the same wall: the add-on captures hours, but it does not hand them over to payroll in a usable state until pay schedules, overtime rules, and pay-type mappings are configured by hand. The setup also straddles two interfaces, since the subscription is purchased inside QuickBooks Online while most of the configuration happens in the classic QuickBooks Time environment. The formally accepted answer to this question organizes the whole process into a fixed sequence, and it is the sequence, more than any single step, that resolves the confusion.

Where the setup actually happens

In QuickBooks Online, open the Time tab and select the pricing option. From there, choose between QuickBooks Time Premium and QuickBooks Time Elite, then either add the feature to the existing subscription or start the 30-day free trial. Once it is active, go to All apps, then Time, then Overview, and select the option to open classic QuickBooks Time. This last hop is where many users stall: the Time tab inside QuickBooks Online is only an entry point, and the pay schedule, overtime, and mapping settings all live in the classic interface.

Set the pay schedule before anything else

In classic QuickBooks Time, open Company Settings, select Payroll & Overtime, then Pay Schedule. Choose the week start day and the pay schedule that matches how the business actually pays, then pick a recent payroll closing date and save. That closing date tells the system which hours have already been processed, so newly tracked time does not overlap with a finished pay run.

Configure overtime to match policy

Still under Payroll & Overtime, select Overtime, make the selections that reflect company policy, and save. The accepted answer flags one option for businesses with more detailed rules: Use Pay Rate Engine, which customizes how overtime calculations are performed instead of relying on the standard defaults.

Map time types to pay types

This step decides whether tracked hours land on the correct pay items. In QuickBooks Time, select Intuit QuickBooks Workforce or QuickBooks Desktop Payroll, then Preferences, and open the Payroll Item Mapping Tool. On the Map Employees tab, pick an employee and, for each time type, choose the matching pay type from QuickBooks. Selections save automatically, so there is no separate save step to forget. Without this mapping, tracked hours have no defined destination among the pay types, which surfaces later as hours that show in time reports but do not attach to the right pay item.

Add employees and contractors

Back in QuickBooks Online, go to All apps, then Time, then Time team. Employees are added with the Add employee option, filling in the required fields. Contractors are added the same way, or from the Expenses page using the contractor option there. Completing the team list before invitations go out avoids a second round of setup later.

Decide what timesheets must capture

In QuickBooks Time, open the QuickBooks menu and select Preferences. The options here control what a timesheet must include: whether a customer, a sub-customer, a service item, or a class selection is required; whether timesheets carry a billable yes/no choice; and whether that billable choice must be made before clock-out. Required selections can be assigned later if someone clocks in without them. Customers can be created or edited in either QuickBooks Online or QuickBooks Time, and the change appears in both places. Billable timesheets flow through to invoicing in QuickBooks, which is why the billable toggle matters beyond payroll. Everything here saves automatically, and any items switched on will import from QuickBooks Online into QuickBooks Time on their own.

Invite the team

With settings in place, select Invite team members, choose who to invite, and pick text or email delivery. Invited workers watch for a text message, accept the invitation, create a user ID and password if they do not already have one, and download QuickBooks Workforce to clock in and out.

Why the order matters

The sequence in the accepted answer is not arbitrary. The pay schedule and overtime rules define how hours are interpreted, the mapping tool defines where they go, and the timesheet preferences define what workers must capture at clock-out. Invitations come last so the team never faces a half-configured system. Users who complete the steps in this order end up with a QuickBooks Time setup that feeds QuickBooks Online Payroll without manual re-entry, and billable hours that carry straight into customer invoicing. For the payroll-side settings that sit alongside this setup, our QuickBooks Online help coverage walks through the related pay-run workflow.