QuickBooks Classes vs. Projects: What's the Difference?

In QuickBooks Online, projects track income and costs for one specific job under a customer, giving you profit per job. Classes tag transactions by a segment of your business, such as a trade division, service line or crew, so you can run a profit and loss by class. Use projects for jobs and classes for divisions; most contractors need both.

What are projects in QuickBooks Online?

A project is a container under a customer for everything about one job: the estimate, invoices, bills, expenses, time and payroll costs. Each project has an Overview tab with income, costs and profit margin, status (in progress, completed, canceled) and its own reports. Intuit's help says projects are available in QuickBooks Online Plus, Advanced and Intuit Enterprise Suite. The setup is covered in how to do job costing in QuickBooks.

What are classes in QuickBooks Online?

A class is a tag you add to transactions (or to individual lines) to group them by part of the business. Intuit describes classes as representing important parts of your company, like store departments or product lines, and the feature is in QuickBooks Online Plus and Advanced. For a contractor, classes usually mean divisions (HVAC, plumbing, electrical), service lines (service, installation, maintenance agreements) or crews. The payoff is a Profit and Loss by Class report: one P&L column per division.

To turn classes on, Intuit's help (updated August 2026) says: open Settings, select Account and settings, go to Advanced, then Categories, and turn on Track classes. You can choose to assign one class to an entire transaction or one to each line, and turn on a warning when a transaction has no class. Turn that warning on; unclassified transactions are what make the class P&L unreliable.

Classes vs. projects side by side

When should you use projects, classes or both?

• Projects only: a single-trade shop that wants profit per job and doesn't need to split the business into divisions. Many small plumbing, electrical and remodeling companies.
• Classes only: a route-based business with no discrete jobs but several service lines, such as a cleaning company tracking commercial vs. residential, or a lawn care company tracking maintenance vs. fertilization.
• Both: a multi-trade or multi-crew contractor. Projects show which jobs made money; classes show which division or crew did. An HVAC and plumbing company tags each project's transactions with the HVAC or Plumbing class and gets a P&L per trade plus profit per job.
• Neither (yet): if the books aren't reconciled and job costs aren't coded, add structure after you fix the basics. See the bookkeeping checklist for contractors.

Suggested class setups by trade

What about locations and tags?

Locations work like classes but apply one per transaction (not per line) and are meant for branches, shops or trucks; they share the 40-item limit with classes on Plus. Tags are a lighter, informal label that doesn't appear on standard financial reports. For contractors, classes and projects cover nearly every need; add locations only if you have more than one physical branch. Intuit's usage limits article (updated August 2026) says you can see your current limits under Settings, Account and settings, Usage.

Common mistakes with classes and projects

1. Using classes for jobs. You'll hit 40 on Plus within a season and never see labor on a job.
2. Using projects for divisions. A project named "Plumbing 2026" is a bucket, not a job; you lose per-job profit.
3. Too many classes. If a class has three transactions a year, it's noise. Keep the list short enough that everyone picks the right one.
4. Unclassified transactions. Turn on the warning and clear the unassigned column on the class P&L every month.
5. Payroll not classed or projected. Field wages are usually the biggest cost; they need to land on the class and project like everything else.
6. Mixing customers' names into class names. Classes describe your business, not your customers.