How to Pay Sick Leave in QuickBooks

2020 and COVID-19 has changed the way we think about sick leave. Traditionally sick leave was used to recover from an illness, care for a sick relative, or even access preventive care. Now, businesses are experiencing sick leave used for child care and self-quarantining prevention. In any case, it’s important for small and medium sized businesses to know how to set up and how to pay sick leave in QuickBooks.

In this article, we’ll first focus on how to pay sick leave in QuickBooks Desktop by answering:

•       How to set up sick pay in QuickBooks Desktop
•       How to set up sick time accrual in QuickBooks Desktop

Next, we’ll focus on how to pay sick leave in QuickBooks Online by answering:

•       How to set up paid sick leave in QuickBooks Online
•       How to set up sick time accrual in QuickBooks Online

How to Set Up Sick Pay in QuickBooks Desktop

Before you learn how to pay sick leave in QuickBooks, you’ll first need to create a sick pay policy. Intuit provides these step-by-step policy instructions to walk you through the process of how to set up sick pay in QuickBooks Desktop payroll:

1. Select Lists, then Payroll Item List.
2. Select Payroll Item dropdown, then New.
3. Select Custom Setup, then Next.
4. Select Wage, then Next.
5. Select Annual Salary or Hourly Wages, then Next.
6. Select Sick Pay, then Next.
7. Enter a name for the item, then Next.
8. Choose the expense account you want for the item, then Finish.

How to Set Up Sick Time Accrual in QuickBooks Desktop

If you would like to provide additional sick time, you can set up sick time accrual in QuickBooks. Intuit provides these step-by-step instructions to set up sick time accrual in QuickBooks Desktop:

1. Select Employees, then Employee Center.
2. Select the employee name.
3. Select Payroll Info, then select Sick/Vacation.
4. Enter the number of hours that are currently available for the employee in the Hours available as of mm/dd/yyyy field. Note: This is the total amount of hours available as of the date you add sick or vacation to the employee profile.
5. Select the Accrual period drop-down menu and choose one of the three accrual periods for sick time listed above.
6. In the Hours Accrued field, enter the number of hours that will be accrued (based on your selection in step 4).
7. (Optional) In the Maximum number of hours field, enter the maximum balance of sick hours that the employee can have.
8. If you do not allow hours to roll over to the next year, select “Reset hours each new year?”.
9. Enter the start date of the accrual year.
   1. Note: Use January 1 for calendar year or hire date if accrual happens on an employee's anniversary date.
10. Enter the date that sick time should begin accruing.
11. To specify accrual information for vacation hours, repeat steps 4 through 10 for the Vacation section of the window.
12. Select OK to record your changes.

How to Set Up Paid Sick Leave in QuickBooks Online

Similar to QuickBooks Desktop, you will first need to create a sick pay policy. If you use QuickBooks Online Payroll, Intuit provides these step-by-step policy instructions to walk you through the process of how to set up paid sick leave in QuickBooks:

1. Go to the Payroll menu, then select Employees.
2. Select employee’s name.
3. In the Pay section, select Edit.
4. In the How much do you pay [employee]? section, select Edit.
5. Select Sick Pay.
6. Enter hours per year and Maximum allowed hours (optional).
7. Select OK, then Done.

How to Set Up Sick Time Accrual in QuickBooks Online

Like Desktop, you can set up sick time accrual in QuickBooks Online. Intuit provides these step-by-step instructions to set up sick time accrual in QuickBooks Online:

1. Go to Settings and select Payroll Settings.
2. Select Paid time off or Unpaid time off.
3. Add a Description.
4. Adjust Accrual Frequency, Hours earned per year, and Maximum available hours.
5. Select OK.

Learn How to Pay Sick Leave in QuickBooks Remotely Using Qbox

Congratulations, you’ve learned how to pay sick leave in QuickBooks but that doesn’t mean COVID-19 isn’t still here. If you find yourself working remotely from home but still need to share your QuickBooks files, consider doing so with Qbox. Qbox will share your QuickBooks files allowing you to manage payroll and other managerial tasks while your staff completes the day-to-day tasks such as invoicing and billing. If you’re interested in learning more about Qbox, visit https://www.qboxplus.com/features/ and for more QuickBooks payroll tips, be sure to visit  https://www.qboxplus.com/quickbooks-enhanced-payroll-desktop-edition/. 

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