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PNWBookkeeper
January 21, 2021
Question

Paid Holidays

  • January 21, 2021
  • 2 replies
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How do I set up payroll items for paid holidays for salary and hourly employees that does NOT accrue vacation and sick time? I currently have 2 paid holiday items, one for salary and one for hourly, but when I input the hours, it accrues vacation and sick time, which I don't want since they aren't actually working. I was thinking about setting it up as a "Piecework" type payroll item and then inputting their hourly rate and putting their hours as the quantity, but not 100% sure how that would show on W-2s.

    2 replies

    katherinejoyceO
    katherinejoyceO
    January 21, 2021

    Hi there, @NWBookkeeper.

     

    It's nice to see you in the Community. I can share some information and steps in setting up holiday pay and adding it to your employee's paycheck.

     

    In QuickBooks Desktop, you'll need to track the holiday pay separately from sick or vacation pay. Let's set this up first by adding a new payroll item.

     

    Here's how:

     

    1. Go to the Lists menu, then choose Payroll Item List.
    2. Select the Payroll Item drop-down and click New.
    3. Choose Custom Setup, and select Next.
    4. Choose Wage, and select Next, then select Annual Salary, and select Next. 
    5. Choose Regular Pay, and select Next.
    6. In the Name used in paychecks and payroll reports field, enter Holiday Pay, and select Next. 
    7. The default account for the expense is Payroll Expenses, then select Finish.

     

    To track the accruals, you'll need to add this item on your employee's setting. Here's how:

     

    1. Go to Employees menu and select the Employee Center.
    2. Double-click the employee's name to edit the payroll information.
    3. Select the Payroll Info folder.
    4. Add the Holiday Pay Item below the Earnings section.
    5. Once done, click OK.

    Adding this item will track the YTD amount once you created paychecks with holiday pay.

     

    To create a paycheck, you can add this together with your Regular Salary or you can create a separate paycheck for holiday pay only. Here's how:

     

    1. In the Earnings section of the paycheck, add the Holiday Pay item.
    2. For Regular Salary and Holiday Pay, enter the hours worked. For example, on a biweekly payroll, enter 72 hours for the regular salary and 8 hours for holiday pay. QuickBooks Desktop automatically adjusts the pay for each item. Please see attached screenshot below for your reference.

     

    It'll now automatically track the YTD amount on the next paycheck.

     

    You can also check out this related article for your reference: Pay a salaried employee holiday pay in QuickBooks Desktop Payroll.

     

    Let me know if you have other questions about tracking holiday pay for your employees. I'll be here to help.

    P
    PNWBookkeeperAuthor
    January 21, 2021

    That doesn't even remotely address my question. I know how to set up and track holiday pay. I asked how to make it so it doesn't accrue sick and vacation time for the hours, since they aren't hours actually worked.

      MichelleBh
      MichelleBh
      January 21, 2021

      Thanks for the quick response and for clarifying your concern, @PNWBookkeeper.

       

      I'm happy to provide the entire process to accomplish your goal about sick leave and vacation time in QuickBooks Desktop. 

       

      Let's put a check on the Do not accrue sick/vacation boxes in the Employee Center or Company Preferences. That way, the sick/vacation will not accrue in the paychecks. 

       

      Here's how: 

      1. Select Employees, then choose Employee Center.
      2. Locate and double-click the employee name. 
      3. Click the Payroll Info tab and pick Sick/Vacation. 
      4. Put a checkmark on the Do not accrue sick/vacation field. 
      5. Tap Save. 

       

      Also, while creating paychecks, ensure that the Do not accrue sick/vac box is checked in the Review Paycheck window. 

       

       

      For your other employees, you can always run these reports below. This way, you can review the time balance, time used, and maximum hours. 

       

      • Employee Contact List
      • Time off List
      • Payroll Item Detail 

       

      For more information, visit this article: Create a Sick and Vacation report for employees. 

       

      Additionally, please browse these articles below about handling worker's information, deductions, payroll, and other related topics. 

       

       

      Let me know in the comment section if you have other concerns. I'm here to help you further. Keep safe!

      MaryLandT
      MaryLandT
      January 21, 2021

      Allow me to step in and share a solution so the sick and vacation pay won't accrue on the holiday pay, PNWBookkeeper.

       

      You need to create two paychecks for the employee. One for the holiday pay and one for the hours worked. 

       

      When you create a holiday paycheck, you need to put a check the Do not accrue sick/vac option. See the attached screenshot below for your visual guide.

       

      Don't forget to uncheck it later for the hours worked paycheck. We don't want to mess up your payroll data.

       

      I'm adding these articles for additional guidance:

      Stay in touch with me if you need anything else concerning payroll. I'm always around here in the Community forum to help you.

      O
      Old 6
      July 12, 2021

      The two paycheck solution is a good short term solution and I thank you for that; however, QB needs a long term simple solution so we don't have to create separate paychecks.  Please!!!

        B
        Blue-River
        August 4, 2021

        I have the same problem.  Looks like the previous office manager for this company used an additional payroll item instead of a wage item.  This way they still get paid and taxes are still calculated but sick/vacation are not accrued.  I thought this was a strange way to do things but I'm realizing now that it's really the only work around.  Two paychecks ain't gonna cut it. 

        ~Sure would be nice if QB could create a way to turn off sick/vacation accrual for certain payroll items.

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