Billing Rate Level

QuickBooks Desktop only allows one billing rate per employee, JR1604.

In QuickBooks Desktop, each employee can be assigned only one billing rate level. This restriction helps prevent confusion and errors in financial calculations, ensuring the accuracy and consistency of billing and payroll data.

Regarding your question about creating a billing rate level that is 40% higher than an employee's hourly rate, you'll need to create corresponding service items that reflect these rates manually. After creating the service items, use them to create different billing rate levels with a percentage 40% higher than the hourly rate and assign them to your employees accordingly.

Here's how:

1. Create three service items for the different employees' hourly rates. (For example: Regular Pay $18, Regular Pay $20, Regular Pay $24)
   
2. Next, create a billing rate for these three service items by going to Lists and clicking Billing Rate Level List.
3. Hit the Billing Rate Level dropdown and New.
4. Enter a name for the first billing rate (For example: Billing rate $18, Billing rate $20, and Billing rate $24).
5. Select Custom Hourly Rate Per Service Item.
6. Put a checkmark for the service item that corresponds to your billing rate and click Adjust Selected Rates.
7. Enter 40% and select higher and standard rate in the dropdown.
   

After that, assign the created billing rate level according to the regular rate of your employee by going to the Additional Info and selecting the Billing Rate Level dropdown.

1. Go to Employees, then click Employee Center.
2. Double-click your employee's name, then hit the Additional Info tab.
3. Select your billing rate under the Billing Rate Level dropdown.
   
4. Go to the Payroll Info tab and enter the regular pay amount.
   

Next, create a timesheet for your employee by clicking the Enter Time and Time/Enter Single Activity. Here's how:

1. Select your employee, then the customer for whom you want to pay for the hours.
2. Choose the service item and payroll item according to the billing rate of the selected employee.
3. Enter how many hours they have worked for that day, then click Save and Close. (The same steps apply to your other employees with different hourly rates)
   

Following that, you'll need to create an invoice using the billable timesheets created for each of your employees.

1. Go to Customers, then click Create Invoices.
2. Select the customer that was associated with the created employee's timesheet.
3. The Billable Time/Costs window will prompt and choose Select the outstanding billable time and costs to add to this invoice?
   
4. Click OK, then select the three billable items from your employees and hit OK.
   
5. It will automatically apply to your customer's invoice with the Quantity (hours worked), the Rate (40% markup rate), and the Amount (the total amount of rate multiplied by the hours worked).
   

Please also note that the same steps will be applied if you want to markup the overtime pay of your employees.

Moreover, I've included this article as your reference in recording invoice payments: Record an invoice payment.

Post a reply if you have other questions about setting billing rate levels for your employee in QuickBooks Desktop. The Community is always here to lend a hand..