We use PTO accrual per hour worked. Because the employee's run a route their work hours can vary. They can work 6 hours one day and 10 hours another day.
In order to be consistent in paying PTO for each employee, how should we calculate the amount to be paid per day?
Assumption: Employee accrued 19.65 hours over 4 months. Worked a total of 589.61 hrs during that time period.
To calculate how much time is available for 1 day:
Divide 589.61 hrs by 16 weeks, by 5 days = 7.37 hrs (average hours worked)
Would this be accurate? Or is there another way that would be better?
Hello there, @Saphire605.
Let me share some information on how QuickBooks handles the calculation of your employee's Paid-Time-Off.
With QuickBooks Desktop, your employee's PTO calculation depends on how you set it up in the system or how it will accrue.
Base on your calculation, since your employee's working hours vary, their paid time off is directly dependent on their hours worked. Just make sure to enter the maximum number of hours each employee should work per week.
If it's 40 hours per week ( the most common hours work per week), here's how:
40 hours (Hours in 1 work week) x 52 weeks = 2,080 hours
2080 hours – 40 hours (Allocated PTO) = 2,040 hours
2,040 hours – 40 hours (5 paid vacation days off = 40 hours) = 2,000 hours per year
40 hours (Hours in 1 work week) ÷ 2,000 yearly hours worked = .02 hours
By using the following calculation, it means your employee will earn .02 hours of PTO per day.
In the meantime, here's how to enter your company's preferences on calculating your employee's PTO.
On the other hand, here's how to set up your employee's individual PTO:
Should you have other questions about managing your employee's PTO calculations, feel free to visit the Community. I'm always here to help.
Thanks for getting back to the QuickBooks Community, @Saphire605.
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Hi@juVielL thanks for getting back to me.
I get how it is calculated.
I guess my question is more, for when they want to take one day, prior to when they have worked one year and they don't work the same amount of each day. How I determine if they should get paid 6 hrs for that day or 8 hours?
Calculating PTO accruals by hours worked offers flexibility, @Saphire605.
The by hours worked accrual rate ensures that employees only earn time off by the number of hours they actually work. This may result to earning less than or more than the other rates would provide. This is particularly great for employees who work a variable number of hours per year or take periods of unpaid leave. By using this rate, you can have the accrued time off only reflect that time spent at work.
Determining whether your employee should get 6 hrs or 8 hrs credit on the day of their PTO depends on your company’s Paid-Time-Off policy. Also, I’d recommend consulting your accountant so you’ll be guided accurately in setting and providing PTO to your employees.