How can I make vacation accrual change (increase) automatically after the second year of employment?

I'll share information about setting up the vacation accrual in QuickBooks Online (QBO), @K_Harvey.

In QBO, the option to automatically change the accruals of your employee after the second (2nd) year of employment is unavailable. You'll have to manually change it after the first (1st) year. I'll walk you through the steps to finish this.

For 1st year:

1. Navigate to the Payroll menu and choose Employees.
2. Look for the employee you need to add this vacation accrual and select the name to open.
3. Scroll down to the Pay Types section and click Edit.
4. Under the Time off pay policies, go to the Vacation pay drop-down.
5. From there, choose Add new vacation pay policy.
6. Enter the name of this accrual in the Description field. 
7. Next, choose Per hour worked and enter 0.01925 in the Hours per hour worked box.
8. Then, enter 120 in the Maximum allowed field and click Save when finished. 
9. Enter 40 in the Current balance box.
10. When creating a paycheck for this employee enter .77 in the Vacation pay box (if you pay them per week). If you pay them every 2 weeks, just multiply it by 2.

For reference in creating employee paychecks, please check this link: Create and run your payroll. 

Please know that the hours in the Hours per hour worked field depend on how many hours your employee works per week. For instance, if there are five (5) working days per week and eight (8) working hours per day, the vacation accrual per hour is 0.01925. 

When the second (2nd) year comes, you just need to edit the hours and balances in steps 7-10. Refer to the bulleted detail below:

• Hours per hour worked: 0.0385
• Current balance: 80

For guidance, read this article: Set up and track time off in payroll. 

You can also invite your employees to create their QuickBooks Workforce account, so they can view their paystubs and W2. For detailed instructions, check this guide: Invite your employees to QuickBooks Workforce to see pay stubs, W-2s, and more if you use QuickBooks Online Payroll.

I'm always here ready to assist if you have any other concerns managing your employee's vacation accrual. Please don't hesitate to leave a reply below. Have a good one.