My employees accrue vacation. When the time comes that an employee leaves, I am required by law to pay out any vacation time accrued not taken. This payout requires source deductions. There is no field or option for me to pay out vacation time earned not taken.
I would love to walk you through the steps in cashing out the employee's accrued vacation hours.
All you have to do is follow these easy steps below:
You can then add the remaining balance for the vacation hour when you create the paycheck or run the payroll.
Please let me know if you have any other questions about vacation time; I'll be more than happy to answer them for you.
Vacation ($) Available and Vacation (Hrs) Available are two completely separate things. The only time you can do an exact division of $ and Hrs and come up with the right answer is if the employee has 1) never had a pay increase, 2) never worked overtime 3) never taken a lump sum payout of Vacation $ at any time and 4) reached a particular year milestone where vacation pay rate changes, i.e. in SK, ten years of service nets you 4 weeks or 4/52 per year instead of 3/52.
As soon as an employee has experienced any of these, their Vac Days (Hrs) Available and their Vac $ Available will no longer match. For example, if an employee works overtime, he is still only entitled to the legislated amount of time per year for Vacation. But he is entitled to all the Vac Pay ($) he earns on those extra hours. It simply means that just because he may have earned the equivalent of 4 or 5 weeks of Vacation $, an employer is not obligated to give him any more Vac time off than what is legislated by the province.
This can also work in reverse where if an employee takes lump sums of Vacation $ at any time (VacPay-Accrual Paid Out payroll item) he may now still be entitled to 10 days of vacation (for example), but only has enough Vac $ to cover 5 days. He may still take his 10 days of vacation, but he would only be paid Vac Pay for 5 days, and the rest would be at no pay.
Unfortunately, Quickbooks does not track Vacation Time taken, per se - it only tracks Vac $ accrued and used. However, you can create a custom report that will show you how many hours of Vacation a person has taken, as well as any lump sum payouts of Vacation $ by filtering for only Vac Pay payroll items and make sure you Display QTY on the report. But it is not a running balance and does not show how many hours have been earned and how many hours have been taken - only what has been taken and entered as vac hours in the pay cheque.
You will have to track these stats outside of Quickbooks in a spreadsheet or other method, if you want to keep track of the time as well as the $.
I apologize - I didn't realize that I was in a Quickbooks Online Forum, thought it was Desktop. Apparently it seems Vac Hrs can be tracked in QB Online. However, all the rest of my comments still apply. $ and hrs don't always match for the reasons stated above.
This is incorrect as that method does not account for the vacation accrued during the most recent period.
Another reason this method does not work for the OP. Is that your method only accounts for people who took their vacation during that period. It does not work for paying out vacation in addition to a fully worked pay period.
Let's try this again as I have the same problem as the OP.
I was running into the same issues that Mike brought up. Here was my work-around for a salaried employee who had resigned and had banked PTO we needed to pay out:
1. I created a regular paycheck for her hours actually worked. (It's important to do this step first to account for the PTO she accrued on this final paycheck.)
2. I created a second paycheck, clicked on her salary to bring up the pop-up where I chose "Skip salary this time only." Then I entered her PTO balance in the Vacation field.
The first paycheck paid her for the hours worked and the second paycheck paid out her accrued PTO.
But what account would this PTO payroll hit in terms of the COA? I would suspect Salary:Sales:Wages: would not be the appropriate place to categorize this PTO payout. Please advise.
This works fine, except, in canada on a final payout of vacation there should be no accrual on the accrued payout. Now my employee has a balance of 3.25 hours and $73.76. I'm guessing I have to now reverse this out and explain to the employee that QBO doesn't do payroll correctly.
Hi @anneewest ,
This depends on where in Canada you are. In Saskatchewan, Vacation Pay is payable on Vacation Pay. This is also true in BC, AB, QC and NL. This is why in QB Desktop, for the final cheque, even when you pay out what you think is the total Vacation Accrued up to that point, the accrual figure still shows a small amount - the amount now owing on what you have just paid them out for Vac Pay. So you have to keep increasing the final payout by bits until the Vac Accrued amount is at $0.00 on the final cheque.
I know that QBO handles vacation pay so much differently than Desktop, and I'm not convinced that it is actually doing things accurately. There are several concerns which I have spelled out in detail to Intuit staff and am hoping that they look at it very closely.
In any case, @anneewest , are you in one of the provinces listed above where Vacation Pay is owing on Vacation Pay? It almost looks like it by your example below; If you have leftover Vacation after you've paid out what you think the accrual should be, it is likely because that is the amount of vacation now accrued on the payout you just did. As I mentioned above, you may have to keep adjusting the amount until the Vacation Accrued is at $0.00, at which point the employee has now been paid out the correct final amount.
If you are not in a province where Vacation Pay is payable on Vacation Pay, then there should be no extra balance after paying out what you see as the final amount accrued and then paid.