Vacation and sick: Set up vacation or sick time policies for the company

First you set up vacation and sick time as company policies. Then you assign the policies to individual employees.

Do you need multiple vacation or sick time policies?

You might. Here's an example:

At Amy's bakery, new employees earn 60 hours of vacation over the year, but employees who have been with the company for over a year earn 80 hours of vacation. Amy will need two policies for vacation, one for each circumstance. Similarly, you will define as many policies for sick pay as your company needs. If all employees earn the same amount of sick pay per year and earn it at the same rate, you may need only one sick pay policy.

1. Go here.
   (Or click the Setup tab.)
2. Click Pay Policies.
3. In the Vacation and Sick Leave Policies section, click Create.
4. Add a policy:
   
   Vacation policy

   1. Choose Category > Vacation.
   2. Enter a description. This is especially useful if you have multiple vacation policies for your company. For example, "Two weeks" or "Three weeks."
   3. Select how often vacation hours are accrued.
      • Beginning of year — we'll credit the total hours you entered for the employee on the first paycheck of the following year (typically in January). Enter your employees' current balances as part of their setup.
      • Each pay period — we'll automatically calculate accruals each time you create a paycheck, based on the number of pay periods in the year.
      • Per hour worked — we'll automatically calculate accruals each pay period, based on the number of hours worked.
      • On anniversary date — we'll automatically calculate accruals on the anniversary of the employee's hire date. We'll credit the total hours that you entered for the employee on the first paycheck after the anniversary date.
   4. Maximum available hours:

      Enter the maximum number of hours that an employee can have available at any time.

      Here's how it works — if you set up a vacation or sick policy that includes a maximum number of available hours and the employee reaches the limit, Intuit Online Payroll stops accruing hours until the employee takes vacation or sick time and the available balance falls below the limit.

      The Maximum available field is optional — leave it empty if you don't want to set a limit on the number of available hours.

   Sick policy

   1. Choose Category > Sick.
   2. Enter a description. This is especially useful if you have multiple sick policies for your company.
   3. Select how often sick hours are accrued.
      • Beginning of year — we'll credit the total hours you entered for the employee on the first paycheck of the following year (typically in January). Enter your employees' current balances as part of their setup.
      • Each pay period — we'll automatically calculate accruals each time you create a paycheck, based on the number of pay periods in the year.
      • Per hour worked — we'll automatically calculate accruals each pay period, based on the number of hours worked.
      • On anniversary date — we'll automatically calculate accruals on the anniversary of the employee's hire date. We'll credit the total hours that you entered for the employee on the first paycheck after the anniversary date.
   4. Maximum available hours:

      Enter the maximum number of hours that an employee can have available at any time.

      Here's how it works — if you set up a vacation or sick policy that includes a maximum number of available hours and the employee reaches the limit, Intuit Online Payroll stops accruing hours until the employee takes vacation or sick time and the available balance falls below the limit.

      The Maximum available field is optional — leave it empty if you don't want to set a limit on the number of available hours.

5. Click OK.
6. Repeat these steps to create as many policies as your company needs for different categories (vacation or sick leave) and for different circumstances (for example, different rates for earning vacation or sick leave).
7. After you set up these policies for the company, assign them to individual employees.

Vacation and sick time hours are calculated only when you create paychecks.

So, if you check an employee's vacation or sick time accrual before you've created a paycheck for the employee in January, the employee record won't include any hours accrued in the new year. This is true even if you've defined the policy so that the hours are earned all at once at the beginning of the year. Create the first paycheck and the accrual will be accurate and current.

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