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Understand sick pay accrual limits in QuickBooks Desktop Payroll

SOLVED•by QuickBooks•1•Updated 1 week ago

In QuickBooks Desktop 2019, sick and holiday time accruals, balances, and shortfalls are displayed on the employee payslips for greater visibility. This also serves as better compliance with the mandated maximum accrual rates.

With QuickBooks Desktop 2019 R3 and later, you'll also be able to set a maximum for carryover sick pay.

Note:
  • When the Warning: Sick Time Available Exceeds Limit window displays, approve or deny a negative sick time balance. Changes to the Maximum Type apply to all employees of your business, both existing and future. Changes to any of the other company preferences for payroll would apply to future (new) employees only; existing employees' preferences would not be changed.For additional payroll setup details, go to the Help menu, then select QuickBooks Desktop Help (or press F1 on your keyboard).

Set sick maximum accrual limits

There are 2 ways to set the max accrual limits for sick pay in QuickBooks Desktop.

Maximum number of hours

The total hours' someone can save up at once. They'll accrue hours as long as their balance is below the maximum. Employees can gain more than the maximum in a single year if they use some sick time.

  • Example:. You set your maximum number of hours to 40. Maria accrues 40 hours by August and uses 10 hours in October. She'll add more sick time on her next payroll payment even though the new year hasn’t started.

Hours accrued at the beginning of year:

The total hours someone can save in one year. Once they reach this maximum, they won't accrue anymore until the next year.

  • Example: Let's say you set your maximum number of hours to 40. Joe accrues 40 hours by August and uses 10 hours in October. He won't accrue any more sick time until the new year starts.

Set sick and holiday time

This is in compliance with regulation.

  1. Go to the Edit menu, then select Preferences.
  2. Select Payroll and Employees, then go to the Company Preferences.
  3. Select Employee Defaults, then select Sick & Holiday.
  4. Under Accrual period, select the appropriate option for you:
    • Hours accrued at the beginning of year: The total hours someone can save in one year.
    • Maximum number of hours: The total hours someone can save up at once.

Note: Establishing the preference applies only to new hires going forward. You will have to go into each existing employee and set the Maximum hours to carry over for them individually.

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