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Set up and track time off in payroll

SOLVED•by QuickBooks•8•Updated January 10, 2024

Learn how to set up and track time off, vacation, and sick pay for your employees.

With QuickBooks Online Payroll and QuickBooks Desktop Payroll, you can set up and track the time your employees take. First, you’ll set up time-off policies like paid or unpaid time off, sick pay, and vacation pay. If you need to, you can add time off at any point if someone needs more.

Note: If your account integrates with QuickBooks Time, you can set up your time off policies there to match what you set up in your payroll account. You and your team members can track time off using QuickBooks Time, which will sync back to payroll.



How to set up time off in payroll

Before any of your employees can take time off, you first need to set up a time off policy. Set up vacation or sick pay with these steps for your version of payroll.

Note: Not sure which payroll service you have? Here's how to find your payroll service.
  1. Go to the Payroll, then select Employees (Take me there).
  2. Select employee’s name.
  3. In the Pay type section, select Edit ✎.
  4. In the Time off pay policies section, select Unpaid time off and/or Sick pay.
  5. Select the appropriate policies for Unpaid time off and/or Sick pay from the respective drop-down menus or you can create new policies.
  6. If you select create new policy, complete the on-screen fields to create your policy
  7. Select Save.

Set up a vacation or sick pay policy for your employees.



How to change your time off policy

Need to update your existing policy? Be sure to update your payroll.

Edit your policy with:

  1. Go to the Payroll, then select Employees (Take me there).
  2. Select employee’s name.
  3. In the Pay types section, select Edit ✎.
  4. In the Time off pay policies section, select the appropriate policies from the Unpaid time off and/or Sick pay dropdown or you can add new policies.
  5. If you select add new policy, complete the on-screen fields to add your policy
  6. Select Save.


How to add paid or unpaid time off

Need to give an employee more time off? Here's how to add more time.

  1. Go to the Payroll menu, then select Employees (Take me there).
  2. Select the name of the employee.
  3. In the Pay section, select Edit ✎.
  4. In the Time off pay policies section, next to the Unpaid time off field, enter the current balance. Or if you want to change the policy, select Add new unpaid time off policy from the Unpaid time off dropdown.
  5. Select the required option from the Hours are accrued dropdown and enter the Hours per year and Maximum allowed  (optional) fields.
  6. Select Save.
  7. For Sick pay, enter the current balance. Or if you want to change the policy, select Add new sick pay policy from the Sick pay dropdown.
  8. Select the required option from the Hours are accrued dropdown and enter the Hours per year and Maximum allowed  (optional) fields.
  9. Select Save.
  1. Select Employees.
  2. Select the employee name.
  3. Select Payroll Info, then select Vacation Pay for [Employee Name].
  4. Enter the amount that is currently available for the employee in the Pay ($) available as of mm/dd/yyyy field and select OK. Note: This is the total amount of pay available as of the date you add vacation to the employee profile.
  5. Select Accrual Hours for [Employee name].
  6. Enter the number of hours that are currently available for the employee in the Hours available as of mm/dd/yyyy field. Note: This is the total amount of hours available as of the date you add sick to the employee profile.
  7. In the Accrual period ▼ dropdown menu select one of the four accrual periods for sick time listed above.
  8. In the Hours Accrued field, enter the number of hours that will be accrued (based on your selection in step 6).
  9. In the Maximum number of hours field, enter the maximum balance of sick hours that the employee can have.
  10. If you do not allow hours to roll over to the next year, select Reset hours each new year?.
  11. Select OK to record your changes.

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