How do I switch an employee from accrued vacation hours to 4% payout each cheque when they still have vacation hours in the bank to use up.

Hi there, 

QuickBooks Online makes it easy to manage the vacation policy for your staff and I'll be happy to show you how. 

To edit the policy, follow the steps below:

1. Click on the Gear icon.
2. Click on Payroll Settings.
3. Click the Time off Policies link below the Payroll and Services section.
4. In the Time off  Policies box, click Create/Edit.
5. In the Category drop-down, select Vacation, enter a Description, select the Accrual Frequency, and then enter the Hours earned per year and the Maximum available hours.
6. Click OK.

Then run the payroll, paying the accrued vacation:

1. Click on Employees tab.
2. Click Run Payroll.
3. Enter all other pay types and the vacation hours.
4. Select Preview payroll and make sure to review vacation hours.
5. Click on Submit payroll.

Give this a try and if you have questions, I recommend contacting our support team using this link.

I've done all that but here is my problem. I have an employee 'Joe Smith' that as been accruing vacation hours and currently has 10 hours in the bank. When I switch him to 4% vacation payout the ability for him to use up the 10 hours in his bank is gone. I no longer have the vacation hours box in Payroll to let me enter those 10 hours when he takes them.

Basically I need him to start getting his 4% vacation payed out as of March 1 BUT I also need him to be able to use the 10 hours he has in his vacation bank. Once that 10 hours is used up then just the 4% pay out will be applicable. 

I hope that makes sense? :)

 I see what you're saying. In order to switch the employee to the 4% accrual, you'd have to pay out the 10 hours first. Say Joe has 2 hours vacation on his next pay, you'll have to add the 10 hours he currently has and pay out a total of 12 hours. After that, you can switch him to the 4%. Let me know if this makes sense. I'm here to help.