Identical to KB, [http://developer.atlassian.com/entry.jspa?entryID=55&categoryID=5] 
 Identical to Wiki, [http://extranet.atlassian.com/dev/read.jsp?page=How+to+setup+time+tracking]

To enable time tracking in JIRA, you must first activate it and then assign permissions for users to log work on issues.

Step 1: Activating Time Tracking

  1. Log in as a user with the 'JIRA Administrators' global permission.
  2. Bring up the administration page by clicking either the 'Administration' link on the top bar or the title of the Administration box on the dashboard.
  3. On the panel on the left, under the title "Global Settings", click on the link labelled Time Tracking'. By default, time tracking is OFF:
  4. Select a suitable value for Hours Per Day (e.g. 8)
  5. Select a suitable value for Days Per Week (e.g. 5)
  6. Select your preferred Time Format. This will determine the format of the 'Time Spent' field when an issue is displayed.
  7. Select your preferred Default Unit (minutes/hours/days/weeks). This will be applied whenever your users log work on an issue without specifying a unit.
  8. Click Activate to turn time tracking ON.

To change the Hours Per Day and Days Per Week once Time Tracking is activated, you will need to deactivate and then reactivate Time Tracking with the new values. You will not lose the existing Time Tracking information when doing this.

Step 2: Allowing users to log work

To be able to log work on issues, users, groups or project roles must first be assigned permissions to the appropriate project(s) as follows:

  1. Once you have activated time tracking (see above) you will see the following screen:
  2. Click the 'Permission Schemes' link.
  3. Select the permission scheme associated with the project(s) for which you wish to allow work to be logged.
  4. Check whether the row labelled 'Work On Issues' contains the appropriate users, groups or project roles. If it doesn't, click the Add link:
  5. Then select the user, group or project role you wish to be able to log work on issues. Then click the 'Add' button.