Why can't i set up a vacation pay policy that is simply 4% of retained earning.

Hi rlandry,

It's great to see that you're using QuickBooks Online Payroll for paying your employees. The QuickBooks Online Payroll follows the government-mandated regulations for vacation pay to help you with your calculations. Let me explain the vacation pay options.

By government labour standards, vacation pay is calculated at 4%, 6%, or 8% of gross earnings depending on entitlement. I'm providing you with the link to the CRA site that explains this; Canada Labour Code-Annual vacations. In line with these regulations, you can set up your vacation pay to accrue by the hour, pay period, anniversary day or the beginning of the year or to be paid out on each pay. You can review the accrual options in this link for more information: Vacation accrual FAQ.

If you have any further questions, please let me know. I'm here to help. Have a great day!

They're seasonal workers. Might work 7 months. Didn't have this issue with Desktop Payroll.

Hi rlandry, 

Thanks for messaging back. I think that we're talking about the same thing; it's just labelled differently in Desktop than in QuickBooks Online. I believe the set-up you're looking for is to Payout each pay period.

Here's how to set up this vacation policy:

1. Go to Payroll, and choose the Employee tab.
2. Select the employee you want to add the policy to, click on the Pencil Icon next to the Pay column header.
3. Scroll down to section #5, Let's create a new vacation policy for employee's name.
4. In the dropdown, select 4.0% Paid out each pay period.
5. Click Done.

This will pay your employees 4%of their gross earnings on each pay cheque. I've included a couple of articles that go into more detail about the vacation policies: 

• Vacation policies for QuickBooks Payroll (QP)
• Payroll set up: Vacation policies

If you have any more questions, let me know, and I'd be happy to go through it with you. Have a great day!

How to set the vacation on quickbooks so it picks up 4% of gross earning.  Right now my quickbooks is picking 4% of hours not earning? which is not correct as per BC labour law.

Thank you