There are two ways in which you can use classes while reporting payroll in QuickBooks. You can choose to assign entire paychecks to a particular class, or you can choose to assign individual payroll items to classes.
If the classes you set up for your company relate to different offices, divisions, or locations, it probably makes sense to assign entire paychecks to a class. Employees generally work in one location, and their payroll is associated with that location.
Alternatively, if your employees work on a variety of different assignments and your classes reflect the various types of work your employees perform, you might find that assigning particular payroll amounts to different classes is a more effective means of reporting.
Choose the method you want to use for assigning classes to payroll by setting a preference. The method you choose applies to all employees. Set the payroll class preference by selecting Preferences from the Edit menu. Click the Payroll & Employees icon and click the Company Preferences tab.
Indicate whether you want to assign one class to each entire paycheck or to the earnings items on paychecks. Note that this option appears only if you have turned on class tracking.