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Level 1

QBO - Accrued Vacation Pay

How do I get the accrued vacation pay to show as an expense in its own account and in a liability account in QBO?

3 Comments
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QuickBooks Team

QBO - Accrued Vacation Pay

Hi my31,

 

The Payroll modules are great add-on services to QuickBooks Online that give you the option of running and recording your payroll data right in your QuickBooks account. Standard and Advanced Payroll are useful for many kinds of businesses and offer different options depending on the one you're using.

 

When you're handling vacation accrual in Standard Payroll, reports like the Vacation and Sick Leave report are useful for keeping on top of the time your employees have accrued. You can also see this information when you edit your employee profile and navigate to the What is employee's vacation policy? as you'll see the Vacation balance square.

 

When it comes to seeing these details in the chart of accounts, Standard Payroll doesn't currently show vacation figures there by default. There is a way, however, to set up your account to map for Vacation Pay Expenses. Here's how.

  1. Select the Gear icon.
  2. Choose Payroll Settings.
  3. Click Accounting under the Preferences heading.
  4. Click the Customize button.
  5. In the Wage Expense Accounts section, choose I use different accounts for different wages.
  6. The program will create accounts for you or you can create your own.
  7. Click OK to save.

You'll note there isn't an option to set up a liability account. At this time, Standard Payroll doesn't offer the options to setup vacation pay accrual in a liability account.

 

When you're using Advanced Payroll, the module automatically sets up a vacation liability account in the chart of accounts. To have accrued vacation pay also map to an expense account, it takes an extra few steps. You can get a clear sense of how payroll items are being mapped and map for the expense account by following the process below.

  1. Select the Gear icon.
  2. Choose Advanced Payroll Settings.
  3. Click Chart of Accounts from the left menu.
  4. Select Advanced to see all accounts,
  5. Find the Wages & earnings expenses section.
  6. Click All wages & earnings expenses.
  7. Find your vacation payroll items and map them to the account you'd like. 

I know how important it is to be able to have a clear sense of these various kinds of figures in your books and I encourage you to leave us your thoughts about these options in way of feedback. Learn how to do that here: How do I submit feedback? This helps us learn what potential growth in the program is valuable to users like you.

 

Take care and have a great weekend.

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Level 1

QBO - Accrued Vacation Pay

I am still a little confused on the Accrued Vacation Pay.  I followed the steps provided.  QB gave me a vacation pay expense but not an Vacation Pay Liability.  I pay some of my employees vacation on each cheque and some are on an accrued basis.  The only option when I try and change the account is to use the vacation pay expense account but this does not show up on a balance sheet as a liability.   Am I missing something?

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QuickBooks Team

QBO - Accrued Vacation Pay

Hello leanne7,

 

Thanks for joining us on this thread. Don't worry, I'll gladly clarify what I went over above to make sure you have a sense of what's happening in your books.

 

Since you're saying you're not seeing a liability account, it sounds like you could be using QuickBooks Online's Standard Payroll module. That module doesn't have a liability account for vacation accrual. There's an expense account, but that's different than a liability account since one is for when the payout has taken place and the other is for the pending payout. We've already been working on a number of changes for the Standard Payroll module, but feel free to share your feedback about this all the same by following the steps here: How do I submit feedback?

 

If you're using Advanced Payroll and still not seeing the options I mentioned, I recommend contacting QuickBooks Online support to go over this with an expert. Here's how to reach support.

 

Phone and Chat: Click Contact Us to learn how to reach phone and chat support.

Schedule a Callback: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Get a callback (Note: Callback hours are the same as regular phone hours.)

Social MediaFacebookTwitter, and Instagram from Monday to Friday between 9 a.m. and 8 p.m. ET

 

We're here and happy to help!