Question

Vacation Accrual Maximums

Forum|Forum|5 years ago
November 27, 2020
5 replies
45 views

I'm setting up a vacation policy in QBO Core Payroll. The company has a maximum accrual per year AND, because they allow carryover of some unused hours, a maximum total accrued. IN QBO Core, the maximum field applies to total accrual only. As a result, I cannot limit the current year accrual and reflect the total accrual for each employee. Is there a work around to this issue? Does Premium Payroll provide for this policy scenario? Carryover of unused vacation hours is a pretty standard employer practice.

To illustrate:

The policy for years of service 0-3 is to accrue .02 hours per each hour worked up to a maximum of 40 hours per year. A maximum of 40 hours can be carried over from the previous year, so the maximum total accrual is 80 hours.

In establishing the new policy, the company is crediting employees with prior service. Two real-time examples:

Employee #1 - has already accrued 40 hours for current year, plus has 29 hours carryover from 2019, for a total current balance of 69 hours. This employee will not accrue any more vacation hours in the current year.

Employee #2 - has already accrued 30 hours for current year, plus has 20 hours carryover from 2019, for a total current balance of 50 hours. This employee can accrue 10 more hours before reaching annual maximum.

Thanks for your help!

Workforce Payroll

C

ChristieAnn 11

Level 9

Hi there, strdwmn.

In QuickBooks Online Payroll, the maximum hours allowed is the total hours that the employee can get.

An employee's vacation time balance will automatically carry over into a new calendar year. For example, an employee received 80 vacation hours per year, with a maximum of 320 hours. The employee's vacation balance will continue to accrue until 320 available hours are reached, even if the period extends over several years. That said, I'd suggest making sure that you enter the hours per year and the maximum allowed hours under the Accrual section.

Here's how:

Click the Payroll menu at the left panel.
Choose Employees section.
Select the employee's name. Then, click the pencil icon beside Pay.
Go to the How much do you pay the employee section. Then, click the Add additional pay types (like overtime, sick, and vacation pay) link.
Select the Vacation Pay box. Enter the hours per year and the maximum allowed hours.
Hit OK and Done.

For additional information on how to add your salaried employee’s sick pay or vacation pay hours using QuickBooks Online Payroll, you can click this article: Enter sick pay or vacation pay hours for salaried employees.

For additional assistance with setting up vacation accrual maximum, I'd suggest contacting our QuickBooks Payroll Team since you're using the Core payroll. They have the tools to pull your account to help you in setting up your employee's information.

Please refer to this article to see different information about salaried employees and how you can determine the hourly rate for salaried employees: Common questions about payroll and salaried employees.

Please let me know if you have more payroll questions,strdwmn. I'd be glad to help. Take care!

S

strdwmnAuthor

Thank you ChristieAnn, I understand how the accrual maximum is working as you explained, but your response does not address the issue of current year maximum accruals. Let me explain further:

Vacation hours accrue at a rate of .02 hours for every hour worked, up to a maximum of 40 hours per year. The accrual rate is equivalent to 40 hours/year for a full-time 40-hour/week employee.
Employee hours vary from week-to-week based on customer demand; some employees work more than 40 hours/week, while others work less, but all employees accrue at the same rate per hour
If an employee works on average more than 40 hours/week over the course of a year, the accrual will need to stop when they reach the maximum 40 hours of accrued vacation time
If an employee works less than a 40 hour/week average, they will accrue less than 40 hours
Carryover of unused vacation time is limited to 40 hours
Each year, every employee's total maximum accrual (current year + carryover) is different based on amount allowed to carry over and years of service (the accrual rate changes based on years of service)

The problem is:

1. How to stop accrual each year when the annual maximum accrual has been reached, AND

2. Reflect total accrual (current year + carryover) on paychecks and in reports

I hope that clarifies my problem.

Thank you!

J

JamesDuanT

QuickBooks Team

Let's check on this, strdwmn.

We can set a Maximum allowed hours for the Time off Policy through the Payroll Settings.

Click the Gear icon in the upper-right corner and select Payroll Settings.
Select the Time off Policies hyperlink under the Payroll section.
Click Edit on the time off policy and the Maximum available 60 hours.
Click OK.

After that, we can manually enter the employee's current time off hours available.

Select Payroll on the left menu and go to the Employees tab.
Select the affected employee profile and click the Pay (pencil icon).
Go to the How much do you pay (employee)? section and click the pencil icon.
Look for the affected time off and adjust the hours manually.
Click Done.

The necessary articles related to time off policies were already provided on the earlier responses.

If you have the same issue, you can contact our Payroll Support Team. They can review your account and will provide you additional assistance in setting your employee time off hours. You can reach them through this link: Contact QuickBooks products and services Support.

We'll be right here if you need anything else.

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