Your Answer
print

Set up, adjust, correct, and track vacation time or accrual for employees in QuickBooks Desktop

Set up vacation time or accrual for employees
  1. From the Employees menu, click Employees Centre.
  2. If the employee is already on the list, right-click the employee's name and choose Edit Employee.
  3. If the employee is not yet on the list, click New Employee.
  4. In the Information Window, select the Payroll Info tab.
  5. Click the Vacation Pay button to set up vacation pay. Add subitems and enter.
  6. Select Retain if you want the Vacation Pay to be on an accrual basis.
  7. Click the Accrual Hours button to set up accrual hours.
  8. Select Pay Every Period if you want the Vacation Pay every pay period.
  9. Note: You can choose not to accrue vacation and accrual hours for a particular pay cheque if, for example, the cheque is for a bonus or commission. The Review Or Change Pay Cheque window has a checkbox to disable accrual for the pay cheque.
  10. Enter the percentage Value to calculate the Total Vacation Pay.
  11. Select the Earning where the Vacation Pay will be calculated.
  12. Click OK.
Steps to follow to adjust vacation pay for an employee in QuickBooks Desktop

There are two ways to adjust the vacation pay for an employee.

Correct over calculation of vacation accrual

You may need to correct an over calculation of vacation accrual if an employee's accrued vacation was set up incorrectly and vacation pay is accruing at a rate higher than 4%. 

  1. Create a Payroll Deduction
    1. Go to List, choose Payroll Item List, select Payroll Item and New.
    2. Select Deduction, enter a name, (Vacation Accrual Adjustment), leave the first two lines blank, choose Liabiltiy Account and select the Expense account that is used on the Vacation Accrual payroll item. Tax tracking, choose 14A, select all taxes, choose Neither,  leave Default Rate and Limit blank and Finish.
  2. Create a Paycheque for the Employee
    1. Choose Unscheduled Payroll, select the employee and Open Paycheque Detail.
    2. Remove the Salary or Hourly from Item Name and choose VacPay - Accrual Paid Out, enter the amount of the over calculation, in the Other Payroll Items, select the Payroll Deduction (Vaction Accrual Adjustment), and enter the same amount as the VacPay Accrual Paid Out, choose Save and Close. This will create a 0.00 amount cheque.  Also note on the paycheque details window that the Vacation Available amount will decrease.
The Vacation Summary Report will still show the original amount in the VacPay - Accrued column but you will see correction in the Vacation used in VacPay-Accural Paid Out column.
Create a report that will show vacation pay accrued and paid out for employees
  1. From the Reports Menu, select Employees & Payroll, then Payroll Liability Balances.
  2. Click the Modify Report Button to open the Modify Report window.
  3. Click the Filters tab and then set the following filters:
    • Click Name and select the Employee's Name
  4. In the Filters tab, select Payroll Item and in Payroll Item dropdown click Multiple payroll Items and select the following payroll items:
    • Vacation Salary (if used)
    • Vacation Hourly Rate (if used)
    • VacPay-Accrued
    • VacPay-Accrual Paid Out
  5. Click on the Display tab and change the selection for Display columns by... to Payroll Item Detail.
  6. Click the Header/Footer tab.
  7. Change Report Title to "Vacation Pay Owing". Change the Company Name to the Employee's Name, then click OK.
  8. To memorize the report for future reference, click the Memorize button and click OK.
Why is vacation pay not accruing when creating a pay cheque for an employee
  1. Go to the Employees menu and select Employee Centre.
  2. Double-click on the employee's name.
  3. Select the Payroll Info tab.
  4. Click the Vacation Pay button.
  5. Select Retain.
  6. Enter a percentage for vacation pay in the Percentage field.
  7. In the Earnings that accrue vacation section, checkmark the payroll items that vacation pay is calculated on.
  8. Click the OK button, then OK again.
 
Did this article help you?
Your Feedback
Cancel Submit