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Employee is set up in QB as a salary. We pay Bi-Monthly (24 pay periods per year). His yearly salary is $60,000. His vacation rate is 6.0%. Each pay period he earns $2,500 ($60,000/24)...and thus his vacation accrual is $150 per pay period (2500/.06). He accrues 5 hrs of vacation time per pay period (15x8/24) and as such his hourly rate of vacation pay accrual is $30 per hour. When he takes vacation time and enters it as such, QB will calcualte the vacation accrual deduction based on how many hours were in the pay period he took his vacation time...rather than at the rate he accrued the vacation pay at. If the pay period in question only had 80 hrs...and he took one day of vacation in that pay period...QB will take the $2,500 earned and divide it by the 80 hrs to come up with an houlry rate of $31.25...and then will deduct his acrued vacation total by $250 ($31.25*8). If the employe only accrues vacation pay at a rate of $30 per hour and this employee takes all of his vacation during pay periods that have 80 hours...then he will end up with a negative amount accured vacation pay...which is not correct. Does anyone know how to set up QB so that Salaried employees have thier deducted vacation pay equal the same rate that it is accrued at?
Hi there, ruffleswest.
QuickBooks will deduct the vacation pay within the pay period you used in the paycheck. It also calculates based on the rate an hours entered.
We can manually change the accrual and rate while the option to set rates on the employee's vacation/pay information is unavailable. I'll send this as feedback to our engineers to have ways on how to calculate accruals with salaried employees.
Let me show you how to modify the employees accruals:
When you'll run payroll, you can change the Rate on the employee's paycheck when they took on leave.
If you need more help, please let me know!
Thank you for your reply...but your "work around" solution is one that is prone to miscalculation due to human error and is not ideal. If you have to do that for 50+ employees every pay period...it will not be done correctly...guaranteed! Please have your engineers figure out a way that this can be done so that it can be calculated automatically. Cheers.
Hello @ruffleswest,
I want to let you know that your voice matters and I'm taking notes of your feedback and submitting it directly to our product engineers. As of this time, you can consider the workaround shared by my colleague, @Catherine_B, you can manually calculate your employee's accrued vacation pay.
For future product updates, you can always visit the following links below for reference:
Fill me in if you have further questions. I'm always around if you need any help.
Again the manually adjustments are not practical...so we will just continue to do what we have been doing...which is also not ideal...but is better that what is currently offered....but it is good to know that the feedback is being sent to the engineers. If I can provide a suggestion for any solution the engineers might come up with (or can incorporate). If we take the example employee already discussed ($60,000 annual salary , 6% vac)....his actual hourly rate can be one of two different options...and as such there should be an option to allow for that hourly rate to be changed...both on the accrual side and the timesheet submission side. If you take the standard formula for working hours in a year (8hrs x 5 days x 52 weeks) you get 2080 working hours over the course of the year...so the hourly rate would be $28.8461 (60,000/2080)...however some companies (like mine) use a different calculation to get the total number of hours worked in a year (365/7 x 8 x 5 = 2085.714) this takes into consideration that we have 365 days of the year and not 364 (7x 52) (leap years aside). With the second calculation the hourly rate is $28.7671. A slight difference...but a difference non the less. Also some companies may only pay 1950 hours per year (7.5 x 5 x 52)...so whatever they can come up with...their needs to be flexibility for each employeer to set their own parameters based on how they calculate their payroll.
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