Vacation time that's accrued in the system will carry over to the next fiscal year in the system. I can see why you may want QuickBooks Online to automatically zero this balance so that vacation time isn't carried over. I'll help shed some light on this for you.
If you'd like to zero out the balance for your employee before rolling into the next fiscal year, follow these steps:
1. Click the Employees tab on the left navigation menu.
2. Click on your employee.
3. Click the small Pencil icon next to Pay.
4. Click the small Pencil icon next to Question 4 - Vacation Policy.
5. Manually edit the vacation balance to 0.
That's all there is to it. At this time, this process must be done manually at year-end. I think setting this up as an automated feature would be a great addition to the program. I'd be happy to pass your feedback on to our product development team to be reviewed for future updates.
Here's another article you may find helpful: How do I pay-out accrued vacation pay?
If you have any other questions regarding vacation pay in QuickBooks Online, please let me know.
Have a great day.
Just make sure that in zeroing out the vacation time, you are not effectively zeroing out their vacation $. They are still entitled to whatever % of their gross earnings your province deems, and usually if an employee has not taken their vacation days earned in one year by the 11th month of the following year, you must pay them out for that previous year. Then you can rightfully zero out their vacation time for that particular year.