Level 1

Salary Employee uses up more vacation than allotted, how do I deduct pay?

A salary employee has used up all of their vacation time and some. How to I deduct their pay instead of having a negative balance of vacation time showing in QBO?

QuickBooks Team

Employees & Payroll

Hello TPInc,


Great question! I'm happy to help you with recording the vacation overage for your salaried employee. Whether you're using QuickBooks Online's Standard or Advanced Payroll service, there's a way to do this. I'll outline each of the options below.


Here are the steps to take for Standard Payroll.


  1. Select Employees from the left menu.
  2. Click Run payroll.
  3. Click on the salary amount (in blue) for the employee in question.
  4. Select Adjust salary this time only.
  5. Enter in the amount of hours the employee went over in vacation. These hours will be unpaid and deducted from their normal salary.
  6. Click Apply.
  7. Proceed with running payroll.

That's all it takes.


Next here are the steps for Advanced Payroll.


  1. Select Employees from the left-hand menu.
  2. Click Run payroll.
  3. Select the Pay group and click Next.
  4. Click Process beside the appropriate Pay period.
  5. Enter hours as usual for your hourly employees on the next screen. (Note: if no hourly employees are being paid, make sure to toggle to NO for the paying option). Click Next.
  6. On the salary employee screen, follow these steps.
    1. Calculate an hourly rate by dividing the Normal Pay amount by the Hours automatically entered in the first column.
    2. Multiply the hourly rate calculated in the previous step by the vacation hours the employee went over.
    3. Subtract the Normal Pay minus the total from the previous step. Enter this in the Current Pay field.
    4. Subtract the preset Hours minus the hours the employee went over. Enter this new total in the Hours field in the first column.
    5. Ensure Pay is toggled ON and click Next.
  7. Click View Details to show the payroll report and verify the calculations and other information. Exit out of that window when done.
  8. Check the box I confirm that I have reviewed the details for this payroll, the hours, earnings and deductions for all employees. All numbers have been verified and are ready for final processing.
  9. Click Approve.

Learn more about QuickBooks Online's payroll services here: Standard and advanced payroll features


To get a hand with any of these steps, feel free to get in touch with our support team using one of the following methods.


Phone: 1-833-317-2226 from Monday to Friday from 9 a.m. to 8 p.m. ET or Saturday from 9 a.m. to 6 p.m. ET

Social Media: Facebook and Twitter from Monday to Friday between 9 a.m. and 8 p.m. ET

Chat: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Start a Chat


Have a great evening!

View solution in original post

Level 1

Employees & Payroll

Thank you so much! This was very easy to solve. Much appreciated!

QuickBooks Team

Employees & Payroll

It's my pleasure! I'm glad to hear it was a quick fix for you. :) Stop by again if you need anything else.

Level 1

Employees & Payroll

What about the desktop pro version?  The leave of absence is only 2 days and it isn’t changing the salary amount. 

QuickBooks Team

Employees & Payroll

Hi Bost,


Being able to have your payroll make correct deductions for unpaid time off is imperative to making sure you're paying your employees correctly. I can help go over how to add unpaid time off to a salary worker.


QuickBooks Desktop makes it easy to track deductions and salary using the payroll add-on. In order for you to add unpaid time off to a salary worker you can do one of two things. One way would be to remove the salary from the paycheque and enter it as hourly for that period. You can create an hourly rate by following the steps in this article


Another way would be to create an unpaid time off payroll item and enter a negative balance to offset the salary for that one paycheque. In order to create a payroll item I suggest reaching out to your accountant to make sure it's tracked properly. If you don't have an accountant don't worry, we got your back. You can go to our find an accountant page to find one in your area to help.


Hope this helped!