How can I exclude overtime hours from vacation time accruals?

Hi there, langleybill1. 

I’m happy to help exclude the overtime pay in QuickBooks. Let's just select the No paid time off policy option. That said, this will not automatically carry over the PTO hours when the worker works overtime.

Let me guide you further. Here's how:

1. From the left menu, click Payroll.
2. Select the Employees tab and tap the name of the employee.
3. Press the pencil icon in the Pay section.
4. From the How much do you pay employee? section, hit the pencil icon to Edit.
5. In the Time off pay policies, select the No paid time off policy option
6. Click Save once done. 

You can also check out this related article for your reference: Set up and track time off in payroll.

In case you need to create reports showing your employee's used, available, accrued, and maximum vacation and sick time, here's a great article you can refer to: Run payroll reports. 

Keep in touch with me if you have other questions about managing your employee’s payroll data. I’m always here to help. Take care!

Thanks for your response.  If I uncheck the Overtime box, then I will not be able to complete the payroll process for those that have overtime.  The main issue is that our Vacation time is based on regular hours worked each week on an accrual basis.  So much for each hour worked.  Employees work a varying weekly hours week but once they hit 40 hours in a week, PTO is not calculated on overtime or holiday hours.  I need a way to exclude overtime and holiday hours from the weekly PTO calculation. 

Thanks for getting back to this thread, @langleybill1. Let me provide some information about excluding overtime and holiday hours from the weekly PTO calculation. 

QuickBooks allows you to not accrue PTO hours when your employee works overtime. We'll only have to uncheck the Paid Time Off option in our employee setup. Let me guide you further. 

Here's how:

1. From the left menu, choose Workers.
2. Click the Employees tab and choose the name of the employee.
3. Select the pencil icon in the Pay section.
4. From the How much do you pay employee? section, click Edit.
5. In the You can also pay section, remove the check-mark for Paid time off.
6. Then select, Done.
   
   

In case you want to pay your employees different hourly rates, you can utilize the Add additional pay types option to add another hourly rate. You can utilize this link for additional reference: Pay an employee different hourly rates.

If you have more questions about managing your payroll, feel free to post them. Take care always.