I'm with the Payroll Canada team. We are currently in development as we speak to addressing some of the long-standing issues with regards to how accrued vacation time and hours are handled in Standard Payroll today. We will be addressing the following issues, with hopes of going live in product some time this spring.
1. Accrued $'s will be tracked on the Balance Sheet automatically after running payroll. Today, if you accrue vacation for your employee, we track those associated hours AND $'s, on the Payroll reports > Vacation report, but not on the Balance sheet. After we make our updates, going forward each time you run Payroll, all accrued $'s will be booked as follows:
- Debit Vacation Expense
- Credit Vacation Liability
Subsequently, when time is taken (i.e. enter vacation hours in Run Payroll), the $ value of those hours will reduce the Vacation Liability accordingly.
- Debit Vacation Liability
- Credit Bank (amount included on Net Pay less any statutory withholdings)
This will take care of the tracking of the vacation $'s on the books. Please note, that today, accrued vacation hours and $ amounts are still tracked on the Payroll Report > Vacation report.
2. We will be adding a new pay type (i.e. Pay-out accrued vacation without time associated - we'll come up with a better name) to allow the ability to pay-out accrued vacation $'s not associated with time. This will come in handy at time of termination, when an employee goes on leave, or when an employee has earned vacation $'s on other earning types (i.e. Bonus, commission or in your case Overtime) that need to be paid out. This will give the employer the ability to pay-out this accrued vacation on the paycheque in the form of $'s without having to associate it with hours. Again, once this new pay type is used, we will:
- Debit Vacation Liability
- Credit Bank (Net pay)
3. Simplify setting up accrued vacation policy going forward. Today, we ask how to setup the vacation policy in the form of hours/year. i.e. 80 hours/year. On the back-end we then do the math to say 80 hours is also equivalent to 4%. This is how we're able to accrue the hours AND $'s for the vacation report. The issue is that it's not clear and leads to confusion. We will be fixing the vacation setup screens, to ask the question in the form of a % vs. hours. We will default those %'s to the provincial minimum (i.e. 4% in Ontario), but you can of course increase those %'s at any time if you offer better premiums to your employees or when it's required (6% at 5 years of employment).
So, in short we are currently in the midst of improving the handling of vacation policy in Standard Payroll as we speak, and hope to have these updates go live in the late spring. Look out for communications to come when it's live.
@Andrew82 Thank you. I appreciate you having taken the time to provide such a detailed response. This seems to address the vast majority of the concerns around the handling of vacation hours and pay. I'm looking forward to seeing this update come through. Please keep me in mind if you need any clients for testing.
As I am reading this post, and yes it is an old post, please update me as to where Intuit QBO Basic payroll is at to updating the Vacation pay policy for accruing vacation pay for employees who do not want it paid each pay. ESB of BC requires the $ amount to show of vacation pay available on each pay. I cannot switch to the QBO Advanced payroll as it does not allow printing of paper cheques (yes, some clients still print cheques). When can we see this function working in QBO?
I appreciate the importance of making sure you're meeting regulations and able to pay your employees using their preferred method. At QuickBooks, it's important to us to meet those needs as well, which is why we're constantly evolving the product.
At this time, QuickBooks Online Standard Payroll doesn't have the option to accrue vacation based on percentage and the vacation amounts will show as hours on the stubs. While we're constantly working to make changes to the program, I don't have timelines that I can share with you about when certain features will be implemented.
In the meantime, I recommend sharing your feedback with the development team by following the steps in this article: How do I submit feedback?
Enjoy the rest of your day!