How do you clear both positive and negative vacation accruals for inactive employees?

Hey there ryan.murphy,

Thank you for giving me the opportunity to help you. 

What is the accrual rate for these employees? If it's higher than 4%, then you'll have to create a payroll deduction item and used it when creating paycheques to correct the hours and amount. 

Here's how to create a deduction item: 

1. Go to List menu at the top menu bar, and choose Payroll Item List.
2. Click the drop-down for Payroll Item, then select New.
3. Select Deduction, then click Next.
4. Enter a name for the deduction (e.g. Vacation Accrual Adjustment).
5. Leave the Enter name of agency to which liability is paid, and enter the number that identifies you to the agency fields blank.
6. From the Liability Account drop-down, select the Expense account that is used on the Vacation Accrual payroll item, then click Next.
7. From the Tax tracking type screen, choose Box 14/A - Employment Income, then click Next.
8. From the Taxes screen, select all the taxes, then click Next.
9. On the Calculate based on quantity screen, choose Neither, then click Next.
10. Select whether to calculate on gross pay or net pay, then click Next.
11. Leave the Default Rate and Limit fields blank, then click Finish.

Next create a paycheque for the employee. Please follow these steps:

1. Go to Employees at the to menu bar.
2. Select Pay Employees, and click Unscheduled Payroll.
3. Select the employee you're working on, and click Open Paycheque Detail.
4. In the Earnings section, remove Salary or Hourly from Item Name.
5. Choose VacPay - Accrual Paid Out.
6. Enter the amount of the over calculation.
7. In the Other Payroll Items section, select the Payroll Deduction (Vacation Accrual Adjustment), and enter the same amount as the VacPay Accrual Paid Out.
8. Click Save & Close. This will create a 0.00 amount on the cheque and the amount will decrease.

In regards to employees whose accruing negative hours, we'll have to double check their payroll setup. Since security of your account is our priority, I suggest you contact us. Our Payroll Support Team can look into your account and investigate this further.

You can find our updated phone number here: 

1. In your browser, navigate to: https://help.quickbooks.intuit.com/en_CA/contact
2. Choose your QuickBooks Product.
3. In the Contact Us page, click Payroll and the issue.
4. In the Here's how to connect with a QuickBooks expert about Pay section, click the Green Phone button to see the support number.

If you're trying to correct or adjust your employee's vacation pay, check out this article: Set up vacation pay and accrual

Hi Ryan, 

I have the same problem - a negative vacation balance for an inactive employee. Did you find a away to set this to 0?

Hello @angelae 

Follow the steps above posted by @Rasa-LilaM , but rather than using a 'Deduction' item for the vacation adjustment payroll item, create an 'Addition' item instead, as per my post above.

Hi @Rochelley   Appreciate this thread is old but had a question regarding your response.

I am curious if your advice to use Addition rather than Deduction is to be applied for both positive AND negative balances, or just negative?

Also, in our case we have a negative balance for a recently laid-off employee who had already used their vac max for the year.  As they were willing to repay the debt to company thru a deduction on last paycheque, and balance thru EFT, how should we post these credits in order to reconcile (Payroll Expense?) account and zero out vacation accrual balance?  Is this done thru a journal entry, or other way?

Realize it's likely 2 entries given one credit is from paycheque deduction, and other is from EFT into our bank.

Thanks much!!!

I have followed these instructions.  However QB is calculating EI on my transaction.  How do I fix that?