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Experienced Member

HOLIDAY Payroll Item

Hello All,

I have noticed that every time I pay an employee for a HOLIDAY, those hours are deducted from their VACATION time accrual.  How can I fix this???

QuickBooks Team

Re: HOLIDAY Payroll Item

Thank you for sharing your concern with us, @SanDiegoTPM.


Welcome to the Community! I'd be glad to help you ensure you're able to create a Holiday paycheck for your employee.


One possible reason the holiday pay is deducted from your employee's vacation time accrual is because of how your Holiday payroll item is set up. Make sure that Holiday payroll item is not set up as a "paid time off". It should be a "Wage".  


Here's how to pay your employee a holiday pay:

  1. Add payroll item.
    1. Go to List.
    2. Click the Payroll item drop-down arrow, choose New.
    3. Choose Custom Setup, then click Next.
    4. Select Wage, then click Next.
    5. Choose Hourly Wages, then Next.
    6. Select Regular Pay, then Next.
    7. Type in Holiday or the name of the payroll item, then Next.
    8. Choose Payroll Expenses.
    9. Click Finish.
  2. Create a paycheck.

That should do it! Feel free to let me know how it goes on your end. I'm always here to help you in creating your employee's paycheck. 

Established Member

Re: HOLIDAY Payroll Item

If you put Holiday hours in QB this way, will those hours also get accrued as vacation time for employees?

Established Member

Re: HOLIDAY Payroll Item



If Holiday hours are entered into QB as regular wage pay as suggested, wont those hours get accrued vacation hours attached to them as well?  Holiday hours are not worked therefore they shouldn't get counted and accrued with vacation hours.  Does Quickbooks know the difference or is there a way for the system not to count Holiday hours as accrued time off?


Re: HOLIDAY Payroll Item

Hi there, @kwindous.


Thank you for the quick response. I'd be glad to help you get this sorted. 


Yes, you're correct. If you set the Holiday hours payroll item as Regular Pay, it'll accrue the vacation hours. 


If you don't want time accrued when paying holiday pay, you can check the Do not accrue sick/vac box on the Preview Paycheck window. Allow me to walk you through.

  1. Click the Employees menu at the top and select Pay Employees.
  2. Select the employee’s name.
  3. Click the Open Paycheck Detail button.
  4. Put a checkmark in the Do not accrue sick/vac box.
  5. Enter or verify the paycheck's details.
  6. Click Save & Close.


I've included some articles and screenshot for additional reference:

For additional help, feel free to reach out to Payroll Support. Our phone agents will be able to assist you in getting this resolved.


Here's how:

  1. Go to
  2. At the top right, select your Payroll Subscription type.
  3. Click Payroll.
  4. Click on the View Contact Info button to get their contact number.

That should get you back on track.


Please don't hesitate to let me know if I can be of further assistance about setting up the holiday pay. Wishing you and your business continued success.