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Senior Explorer *

PTO Calculations - Employee daily hours vary

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?

 

 

 

5 Comments
QuickBooks Team

Re: PTO Calculations - Employee daily hours vary

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:

  1. Figure out how many hours your employee works in a year.
  2. Multiply it with the number of weeks in a year.

    40 hours (Hours in 1 work week) x 52 weeks = 2,080 hours

  3. Subtract the number of hours amount allocated for PTO.

    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

  4. Divide the number of allocated vacation hours by the total 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.

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On the other hand, here's how to set up your employee's individual PTO:

  1. Go to the Employees menu and click the Employee Center.
  2. Double-click the name of the employee on the Employees folder.
  3. Click the Payroll Info tab on the right side.
  4. Select the Sick/Vacation tab.
  5. Fill in the details for hours available and hours used on the Sick information.
  6. Click the drop-down arrow for Accrual period and select Every hour on paycheck.
  7. Enter the Hours accrued per hour paid.
  8. Click OK after filling in the other details.

Should you have other questions about managing your employee's PTO calculations, feel free to visit the Community. I'm always here to help.

Senior Explorer *

Re: PTO Calculations - Employee daily hours vary

 

@juVielL 

QuickBooks Team

Re: PTO Calculations - Employee daily hours vary

Thanks for getting back to the QuickBooks Community, @Saphire605.

 

My colleague @juVielL already responded to your concern. If you're not able to see her answer, you can try to sign out and sign in back to your Intuit account.

 

If the same thing happens, let's perform the basic troubleshooting steps which is to open your browser in incognito/private mode. This mode doesn't use the existing cache data files to load a webpage. 

 

Here are the keyboard shortcuts to open a private browser: 

  • Google Chrome: press Ctrl+Shift+N 
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Please let me know how it goes by clicking the Reply button below. I'll be around to help. 

Senior Explorer *

Re: PTO Calculations - Employee daily hours vary

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?  

QuickBooks Team

Re: PTO Calculations - Employee daily hours vary

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.

 

Feel free to visit us here in the Community if you have other questions about provisioning your employee’s with Paid-Time-Off. I’m always here to help.