What QBO Payroll option do you put for an employee that is no longer on payroll, but still needs to accrue vacation?

Hi zmaleki51,

It's nice to hear from you again. Having an employee accrue vacation when they're no longer on payroll is a different situation. I can explain how the accrual works, and you can choose how you'd like to proceed.

To use the payroll module for accruing vacation, you'll need to set up the employee in the payroll. You can set vacation hours to accrue per pay period, on an anniversary date or the beginning of the year. With these settings, it'll accrue regardless of the hours worked. Vacation pay works strictly as a percentage of the earnings. You can review this in more detail in this article: Accrue vacation in Payroll. The vacation hours are none posting until used. The vacation pay is posted to the vacation payable liability account until withdrawn.

I hope this helps. Reach out if you have further questions. Take care.