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Add and manage leave in QuickBooks Online Advanced Payroll

by Intuit3 Updated 1 month ago

Learn how to efficiently add, track, and adjust leave for your employees in Advanced Payroll. This article covers key processes, including adding leave during pay runs, managing leave allowances, and handling adjustments to ensure accurate payroll records.

This article is for customers who use QuickBooks Online Advanced Payroll.

Recording and managing employee leave

QuickBooks Online Advanced Payroll allows you to manage leave efficiently by adding, approving, and adjusting leave balances directly within pay runs.

  1. Go to Payroll, and select Pay Runs.
  2. Select the pay run.
  3. Select the employee's name to open their pay run details.
  4. Select Actions.
  5. Select Take leave. A new line will show under the Leave Taken section.
  6. Enter the following:
    • Leave category - QuickBooks shows the number of hours left for the chosen leave next to each leave option.
    • Notes
    • Units (hours taken)
  7. Select Save.

Note: If you enter more hours than the employee is entitled to, a warning will show that says "This employee has taken more leave than they have accrued". QuickBooks will allow the employee to go into a negative leave balance.

To add accrued leave to a pay run, first unlock the pay run.

  1. Go to Payroll, and select the Pay runs tab.
  2. Select the unfinalised pay run to open the pay run details.
  3. Select the employee.
  4. Select Actions.
  5. Select Accrue leave.
  6. Enter the number of Hours.
  7. Add notes as required.
  8. Select Save.

You can add leave in advance from the Employee homepage. To do this:

  1. Go to Payroll, and select the Employees tab.
  2. Select ▼Manage employees.
  3. Under Leave, select Create requests.
  4. Select the Employee and Leave Category.
  5. Select the First day of leave and Last day of leave.
  6. Tick whether or not you wish to Approve immediately.
  7. Select Save.

Note: If an employee requests more hours than usual, just apply the extra amount. The next pay run will carry over any remaining hours.

  1. Go to Payroll, and select the Employees tab.
  2. Select ▼Manage employees.
  3. Select Manage requests. 
  4. Apply any relevant filters.
  5. Select the ✏️pencil icon to edit the leave or the Tick icon to approve the leave.
  6. Select Close.


Creating and managing leave allowance templates

Leave allowance templates simplify leave management by setting predefined accrual values for employees. They help maintain consistency and streamline the process when adding or updating leave entitlements.

  1. Go to Payroll Settings and select Leave allowance templates.
  2. Select Add.
  3. Name the template.
  4. Select the appropriate leave year start date setting from the dropdown list. The leave year is used on each accruing leave category as you are able to choose to accrue leave based as per an 'ongoing basis', or 'based on the employee's leave year'. If you select The following date, choose the date and year from the calendar.
  5. Select the leave categories you want to activate for this template. Employees will only be allowed to access and apply for the types of leave you switch on.
  6. If you want to change the values for a leave category, select the Override button.
  7. Select Save.
  • To copy a template, select the copy icon next to the template name.
  • To delete a template, select the delete icon, then Delete to confirm.


Managing leave without pay

Employees may take unpaid leave, and QuickBooks allows you to create leave categories that don’t track balances. This ensures payroll calculations remain correct without deducting from accrued leave.

  1. Go to Payroll SettingsLeave Categories.
  2. Create a new leave category or edit an existing one.
  3. Under Employee leave balance, select Not Tracked.
  4. Select Save.

Note: When applied in a pay run, leave without pay will not generate balance warnings.



Leave adjustments

If leave has been incorrectly recorded, you can make adjustments to correct balances. For example, if annual leave was mistakenly paid instead of sick leave, adjustments ensure accurate records and payroll.

  1. Create a new pay run or adjust within the next scheduled pay run.
  2. Open the employee's pay run record.
  3. Select Actions, then Adjust Leave.
  4. Make the necessary adjustments:
    • Negative adjustment (-): Reduces leave balance.
    • Positive adjustment (+): Adds to leave balance.
  5. Add notes if required.
  6. Finalise the pay run.

Example: If 8 hours of annual leave was incorrectly recorded instead of sick leave:

  • Enter -8 hours under annual leave and +8 hours under sick leave.
  • If "Apply Earnings Rules" is selected, adjustments may generate new earnings lines.


Understanding leave accruals and caps

Leave accrual settings impact how leave is accumulated, used, and carried over. Different setups ensure that employees receive the correct entitlements based on your business's policies.

  • Ongoing Accrual (No Cap): Leave accrues continuously until termination.
  • Ongoing Accrual (Capped at 20 Hours): Leave stops accruing when the balance reaches 20 hours and resumes when it drops below.
  • Leave Year-Based Accrual (Capped at 20 Hours, Full Carry Over): At the start of a new leave year, the full balance carries over and accrual restarts.
  • Leave Year-Based Accrual (Capped at 20 Hours, 5-Hour Carry Over): Only 5 hours of unused leave carry over to the next leave year.
  • Accrue in Advance (152-Hour Cap): Full entitlement is given upfront at the start of the leave year.
    • If an employee joins mid-year, they receive a pro-rata amount.
  • Changes to existing categories to "accrue in advance" are not supported.
QuickBooks Online Payroll Advanced

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