# Running Labor Distribution in WiseCost - URL: https://www.usewisecost.com/help/labor-distribution/running-your-first-distribution - Audience: Admins - Last updated: 2026-09-19 - Part of the WiseCost Help Center: https://www.usewisecost.com/help > Run labor distribution in WiseCost: pick a payroll period, review each employee's pay and hours, and post one journal entry to QuickBooks Online. To run labor distribution in WiseCost, open **Labor Distribution**, choose a payroll period that is ready, review each employee's hours and pay, and click **Post Journal Entry**. WiseCost allocates each employee's pay across the classes or projects they worked on and posts a single journal entry to QuickBooks Online. One period takes a few minutes. **Who can do this:** an Administrator. ## What labor distribution is **Labor distribution** is the process that converts approved timesheet hours plus pay into labor cost per contract, grant or indirect account, and records it in the general ledger. It is how an hour worked becomes a cost on a contract. For government contractors it supports labor charges under DCAA review. For nonprofits and grant recipients it is how salaries charged to a federal award follow the actual effort recorded, as 2 CFR 200.430 expects. ## Before you start - The period's timesheets are approved. See [Approving and rejecting timesheets](https://www.usewisecost.com/help/timesheet-approvals/admin-approval-workflow). - Every employee has pay configured in **Company Setup → Employees** (pay per period or an hourly rate), or you will import the period's real payroll in step 2. - QuickBooks Online is connected, and the **Default credit account** in **Company Setup → Company settings → General** is the one you want. ## 1. Setup & Check 1. Open **Labor Distribution**. Each payroll period shows its employees, timesheets and total hours, and a health check. 2. Look for the period marked **Ready**: all timesheets approved and all employees with a pay rate configured. A period marked **Action required** tells you what is pending, for example timesheets waiting for approval. 3. On the ready period, click **Review & Adjust**. [Screenshot: Labor Distribution setup step with the health check passed] ## 2. Review each employee's pay The **Employee Review** step lists every employee in the period with their pay per period, total hours and estimated hourly cost. 1. Check each row. The cost comes from the employee's pay per period or hourly rate. 2. Optional: click **Import payroll** to use the real payroll of the period from Gusto, ADP or Paychex. See [Importing payroll from Gusto, ADP or Paychex](https://www.usewisecost.com/help/labor-distribution/importing-payroll-from-gusto-adp-paychex). 3. Optional: click **Add adjustment** on a row, or exclude an employee from this run with the remove button on their row. See [Employer taxes, benefits and adjustments](https://www.usewisecost.com/help/labor-distribution/employer-taxes-benefits-and-adjustments). 4. Click **Distribution Preview**. [Screenshot: Employee review step listing each employee's hours and pay for the period] ## 3. Preview & Post The **Preview & Post** step shows the journal entry line by line before anything is sent: contract, employee, account, location, debit and credit. 1. Review the lines, the **Date** and the **Credit Account**. 2. Click **Post Journal Entry**. [Screenshot: Preview of the journal entry lines before posting to QuickBooks] ## What happens next WiseCost confirms that the journal entry was posted to QuickBooks Online. The payroll period becomes Posted and its timesheets become **Locked**. [Screenshot: Confirmation that the journal entry was posted to QuickBooks Online] - The entry and its lines are in **Journal Entries**. See [Journal entries and reversals](https://www.usewisecost.com/help/labor-distribution/journal-entries-and-reversals). - The [Labor Distribution report](https://www.usewisecost.com/help/reports-and-audit-trail/labor-distribution-report) reads from the posted entries, so it matches QuickBooks Online. - A period that crosses two months posts one journal entry per month. ## How the numbers are calculated - Each employee's pay for the period is spread across what they worked on, in proportion to their hours. - Amounts are rounded to the cent, and the rounding difference is applied to the employee's largest line, so each employee's total is exact. - One credit line balances the entry against your credit account. - If your company uses Locations, each line is posted with its QuickBooks Location. ## Undo it If you find a mistake after posting, reopen the period. WiseCost never deletes the entry: it posts a reversal to QuickBooks Online, and you run the distribution again. See [Reopening a payroll period or timesheet](https://www.usewisecost.com/help/timesheet-approvals/reopening-a-closed-period). ## Common questions ### How do I do labor distribution in QuickBooks Online? QuickBooks Online has no labor distribution of its own. With WiseCost connected, you approve the period's timesheets, open **Labor Distribution**, review pay and hours, and post one journal entry to QuickBooks Online that charges each contract its share of labor cost. ### Does WiseCost post to QuickBooks Online automatically? No. Nothing is posted until you review the preview and click **Post Journal Entry**. ### Why is a period marked Action required? Something is pending, usually timesheets that are not approved yet or an employee with no pay configured. The card tells you which. ### What if a payroll period covers two months? WiseCost posts one journal entry per month, so each month's labor cost lands in the right accounting period. ## Further reading - [Labor Distribution for Government Contractors: How It Works and Why It Matters](https://www.usewisecost.com/blog/labor-distribution-government-contractors) - [Labor Distribution in QuickBooks: Spreadsheet vs. Add-On vs. ERP](https://www.usewisecost.com/blog/labor-distribution-quickbooks-spreadsheet-vs-addon-vs-erp)