Best way to record unused vacation pay on final paycheck in QB Desktop

advance769 · ‎January 10, 2022

Hello -

I would like to know your best/correct way to record unused vacation pay on an employee's final paycheck (for salaried employees).

Many years ago we had an 'Addition' payroll item called Unused vacation pay and it was set to "Compensation" for tax tracking - this seemed to work - but does not affect the 'Available time off'.

My new solution is simply to use the regular "Salary Vacation" payroll item in the earnings section and type in the hourly rate and number of vacation hours remaining. But this, of course ends up showing over 80 hours for the total (we are payed bi-weekly)

For example: Employee salary is $1000 each pay period (80 hours). They have 40 hours unused vacation pay. So, total hours shows 120 hours.

I'm okay with doing this, but thought I'd see if there is a better solution.

Thanks in advance!

Ann

BigRedConsulting · ‎January 11, 2022

Based on your screenshot, it looks like "Salary Vacation" is an Hourly item. If so, then this is the right way to cash out vacation for a salaried worker, so it doesn't impact their regular salary.

advance769 · ‎January 12, 2022

Hi Big Red Consulting -

Thanks for responding.

I actually typed in the hours manually; normally it's blank and as I add the hours, it adjusts the rate amounts. Sorry for the confusion.

Here are my steps:

1. I make sure to write down the initial gross amount - since "Salary" still needs to remain the same.

2. I figure out the hourly rate

3. I add the row for "Salary Vacation" and enter the appropriate number of hours remaining. And the hourly rate. (adding the hours will zero out the remaining vacation)

4. Then I make sure to adjust the 'Salary" rate back to gross. And manually type in 80 (this may not be necessary, but I like the employee to see that they are still being paid for the full 80 hours plus the X hours of unused vacation)

Maybe this is still the best way?

Ann

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Best way to record unused vacation pay on final paycheck in QB Desktop

Best way to record unused vacation pay on final paycheck in QB Desktop

Best way to record unused vacation pay on final paycheck in QB Desktop

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