When I pay vacation hours, the amount is debited from my "Vacations to pay" liability account by Wagepoint. Shouldn't it be credited? Debiting reduces the balance.

Hello @lvledoux 

That is correct.  The amount should be debited to your Vacation Payable liabliity account.  The Vacation Pay cycle is as follows.

1.  Vacation is accrued to Vacation Payable.

DR     Vacation Expense (or whatever wage expense account you are mapping this to)

CR     Vacation Payable Liability

2.  Vacation is paid to Employee.

DR    Vacation Payable Liabliity

CR    Bank

Vacation accrual is meant to work this way.  The accrued vacation amount is debited to Vacation Expense initially because you must recognize the expense in the period in which it was earned.  Only the payment is being deferred to a later time so it has to go into a liability account until such time as you pay out the owed vacation to the employee.  

Hope this helps :)