Thanks for joining us in the QuickBooks Community! I want to make sure you have the options for paying out your employee's vacation time in addition to the regular salary hours. I can show you how to do this in QuickBooks Online.
Generally speaking, it's as lashedlifter says: either an employee is working or on vacation. This is why the program is not allowing you to put both salary and vacation amounts as you're running payroll. The best way to handle this is by creating separate cheques for the salary amount and the vacation amount being paid.
There's also a workaround you can consider, which I'll outline below for both versions of Payroll. In both cases, it means adding the vacation as an additional pay type that's separate from the default QuickBooks vacation pay item. The process for doing this, however, is a bit different in each version of payroll, so simply choose the one you're using and follow the steps.
Paying out vacation in Standard Payroll
Part 1: Set up a vacation pay out pay type
Part 2: Run Payroll
When you run payroll, you'll now see the program default Vacation Pay field, which links directly to the vacation pay on the employee profile, as well as your new pay type. Fill in the vacation amount going on this pay cheque in dollars in that field. This will add to the pay run rather than zeroing out the salary amount.
Part 3: Edit the vacation amount on the employee profile
This part could potentially be done before the pay run if you'd like. You can follow the steps from Part 1, but this time you'll be looking for the Let's create a new vacation policy portion when you get to step 4. There you'll see the amount of accumulated vacation for the employee. You can manually change and reduce the amounts here to reflect what you paid out the employee. In addition to appearing here, the vacation information for each employee is also available in the Vacation and Sick Leave report accessed through the Reports tab, although it cannot be changed there. It's simply a good reference point.
Paying out vacation in Advanced Payroll
Part 1: Set up a vacation pay out income type
Part 2: Add the income type to the employee profile
Part 3: Run Payroll
For the final part, you'll run payroll as normal. Please note that you won't see the that pay type added to the total until the Approve Payroll screen. There, you can click View details to see the breakdown of the hours and amounts, which will include the vacation payout income type.
Part 4: Contact QuickBooks Online support to adjust the vacation hours
For Advanced Payroll, adjusting the hours and dollars related to the vacation for the employee takes place in the back-end system. Because of that, a tech support agent would have to do this for you. You can reach out using the contact details below.
I know this is a lot to take in, so please don't hesitate to reach out to QuickBooks Online support outside of the QuickBooks Community if you'd like a hand with this or to discuss the options in more detail. We're here to help, and here's how you can reach us.
Schedule a Callback or Chat: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Get a callback or Start a Chat
Have a great rest of your day.
I was just planning on issuing a separate cheque because I naturally assumed that the reason it reduced the salary was exactly as lashedlifter stated. Since I'm new to QBO payroll, I just thought I would check to see if there was something I was unaware of. I appreciate all the help.
You're welcome! It doesn't hurt to check in on the various options for the features you're using in QuickBooks Online when you're unsure. That way, you can have confidence you have everything set up as you need in your books and that things are running as they should. Feel free to stop by again with more questions. :)
That's a great question, and QuickBooks Community is a great place to get an answer. Using QuickBooks Online Payroll can make paying your employees a breeze. I can explain how you pay the regular pay and the vacation amount within one pay period.
If your pay period is the first to the fifteenth, your employee would have regular hours for those two weeks. For example, they regularly work 40 hours a week so that they'd accumulate 80 hours in their pay period. If they work 40 and take 40 as vacation, it'll reduce the salary by 40 hours of vacation. Their paycheque will remain the same gross amount, but it will be split between regular pay and vacation. If you have other questions about vacation pay, you can review this article: Vacation accrual FAQ.
To enter the vacation hours for an employee:
I hope this clarifies the vacation pay on a paycheque for you. If you need further assistance, reach out. I'm here to help. Have a great day!
Thank you, I understand that concept. The reason for looking for the answer is because I was paying out additional unused vacation and went beyond the pay. I accrue vacation, first payroll on QBO and needed to terminate an employee who was owed more vacation than the salary, therefore the salary disappeared. Two days searching and due to me reading "they are either working or on vacation" at the top just set me off. Also on chat for 2 hours earlier with no answer. I did find my first resolve you cannot terminate anyone without processing at least one paycheque in the QBO system. Then I couldn't create the final pay to include the vacation. Did two cheques at the end as I just had figure out a way on my own.
I did learn something and I really appreciate the response.
I'm glad that you found a resolution. Thanks for clarifying what you were looking for. QuickBooks Online Payroll will also create an ROE, which can be a big timesaver. In case you haven't done one before, I've included an article with the steps and another one that explains calculating the vacation pay on a final paycheque:
Let me know if you require any other assistance. Have a fantastic evening!