Set up and track time off in QuickBooks Payroll

With QuickBooks Workforce, you can give your employees time off and track it in QuickBooks. This video will go over how to set up time off in QuickBooks, how to account for it when you run payroll, how you can track how much time off employees have left, and how employees can track their time off in QuickBooks Workforce.

Set up time off for employees and make managing your team easier with QuickBooks Payroll.

1. Go to All apps , then Team, then Employees (Take me there).
2. Select your employee, then Time off.
3. From Time off, select Start or Edit.
4. Select Add new [time off pay] policy from the dropdown ▼ menu to add a policy for:
   • Vacation Pay
   • Paid time off
   • Sick Pay
   • Unpaid time off
5. Complete the on-screen fields to create your policy, then select Save.
6. When finished, select Save.
7. The policy you created will be available to all of your employees. Select this policy for your other employees, or create a new policy for them.

Step 1: Create a time off policy

1. Go to All apps , then Time, then Time off (Take me there).
2. Select Set up time off policies.
3. If you already have policies and want to add another, select Policies, then Add time off policy.
4. Choose the Type (for example: vacation, sick, or other PTO type).
5. Enter the Name and Description of the policy.
6. Choose whether this is an unlimited policy.
   • If you choose unlimited, skip to Step 4: Assign the policy to employees
     

Step 2: Set accrual details

If the policy is not unlimited:

1. Under Accrual, choose how often hours are added:
   • Yearly
   • Every pay period
   • Based on hours worked
   • Manually
2. Enter the hours and accrual period (for example, hours per year or per pay period).
3. Choose when the accrual period should be renewed:
   • On the employee’s hire date, or
   • On a custom date (for example, January 1 each year).
     

Step 3: Set balance limits and carryover rules

1. Under Balance and carryover, choose if any limits apply to:
   • The accruals (how much can accrue in a period), and/or
   • The overall balance (maximum hours an employee can hold)
   • The ability for employees to request time off resulting in a negative balance.
     1. Note this setting does not apply to payroll admins nor managers
2. Choose if unused balances can be carried over to the next period, and if so, how much.
3. Select Create policy.
   

Step 4: Assign the policy to employees

After creating the policy, assign it to employees and set any starting balances.

1. On the policy creation flow, assign policy members and enter a Starting balance if applicable.
2. Review the time off summary, then select Done.

You can also assign or edit policies later from each employee’s profile or in bulk.

Step 1: Create a time off payroll item

1. Select Lists, then Payroll Item List.
2. Select Payroll Item ▼ dropdown, then New.
3. Select Custom Setup, then Next.
4. Select Wage, then Next.
5. Select Annual Salary or Hourly Wages, then Next.
6. Select Sick or Vacation Pay, then Next.
7. Enter a name for the item, then Next.
   Note: If you use time off you can rename this item to TO.
8. Choose the expense account you want for the item, then Finish.

Step 2: Add a time off policy to your employee

1. Select Employees, then Employee Center.
2. Select the employee name.
3. Select Payroll Info, then select Sick/Vacation.
4. Enter the number of hours that are currently available for the employee in the Hours available as of mm/dd/yyyy field.
   Note: This is the total amount of hours available as of the date you add sick or vacation to the employee profile.
5. Select the Accrual period ▼ dropdown menu and choose one of the three accrual periods for sick time listed above.
6. In the Hours Accrued field, enter the number of hours that will be accrued (based on your selection in step 5).
7. (Optional) In the Maximum number of hours field, enter the maximum balance of sick hours that the employee can have.
8. If you do not allow hours to roll over to the next year, select Reset hours each new year?.
9. Enter the start date of the accrual year.
   Note: Use January 1 for calendar year or hire date if accrual happens on an employee's anniversary date.
10. Enter the date that sick time should begin accruing.
11. To specify accrual information for vacation hours, repeat steps 4 through 10 for the Vacation section of the window.
12. Select OK to record your changes.

1. Go to All apps , then Payroll, then Employees (Take me there).
2. Select your employee.
3. From Time off, select Start or Edit.
4. Select Edit ✎ next to the policy to make changes, or update the Current balance.
5. Edit the policy, then select Save.
6. When finished, select Save.

Manage policy assignments in bulk

1. Go to All apps , then Time, then Time off (Take me there).
2. Select Policies.
3. Find the policy and select the Actions icon, then choose:
   • Assign employees to add employees to the policy, or
   • Unassign employees to remove employees from the policy.
4. When assigning employees, add a starting balance if applicable.
5. When unassigning employees:
   • Existing time off requests will be preserved.
   • Policy balances will be removed.
6. Select Save.

Manage policy assignments for a single employee

1. Go to All apps , then Team, then Employees (Take me there).
2. Select your Employee, then select the Time off tab.
3. To add a policy:
   • Select Assign policy.
   • Choose the Time off type, Policy, and Current balance (if applicable).
   • Select Save.
4. To cancel a policy for that employee:
5. Select the Actions icon next to the policy, then Cancel.

Change your policy settings

1. Select Edit, then Preferences.
2. Select Payroll & Employees then go to the Company Preferences tab.
3. Select Sick and Vacation.
4. In the Sick or Vacation pay section, you can update the Accrual period, Hours accrued, and Maximum number of hours to accrue.
5. Select Reset hours each new year? if you don’t let hours to roll over to the next year. 
6. In the Sick and Vacation Accrual section, make sure to select Sick and Vacation hours paid if you don't want time accrued when paying sick and vacation.

Update your employee’s time off balance

1. Select Employees, then Employee Center.
2. Select the employee's name.
3. Select Payroll Info, then select Sick/Vacation.
4. In the Sick or Vacation pay section, enter the number of hours that are currently available for the employee in the Hours available as of mm/dd/yyyy field.
   Note: This is the total amount of hours available as of the date you add sick or vacation to your employee’s profile. 
5. Select OK to record your changes.