Don’t create an extra paycheque to adjust the vacation owed. Creating a new paycheque will affect the total paycheques per year, ROE reporting, and other factors.

Verify vacation percentage per paycheque

1. Open the employee record and select the employee in question.
2. Select the Income tab.
3. Verify the Vacation Rate is the correct percentage.
4. Check Retain Vacation. You can uncheck it after everything is correct.
5. If you made any changes, select Save and Close.
6. If you just started using Sage 50 Payroll, go to Section 3. 

Adjust the Vacation Owed Amount for each employee

1. Adjust the last paycheque for the employee or adjust the next paycheque.  
    CAUTION: If adjusting the last paycheque, reprint the adjusted pay stub so the employee has an updated pay stub.
2. On the Vacation tab, under Vacation Earned for This Period, set the Vacation Earned to $0.00.
   
3. If the Vacation Owed amount is too high, enter a lower number.  For example, if the vacation owed shows 104.00 and the correct amount is 100.00, enter -4 in the Vacation Earned, This Period field.
    
   
4. If the vacation owed amount is too low, enter a higher number. For example, if the vacation owed shows 100.00 and the correct amount is 108.00, enter 8.00 in the Vacation Earned, This Period field.
    
   
   
    NOTE: The above solution will affect both the vacation payable account balance and the vacation owed for the employee.
5. Select Report, then Display Payroll Journal Entry / Transaction Detail Report to see the journal entry.
6. Vacation Owed will now update to the correct amount.
7. Select Post.
8. Check the Retain Vacation box in the employee record on the Income tab to retain vacation.

You just started using Sage 50 Payroll in the middle of the calendar year

 NOTE: Did you post manual journal entries? 
There are two options to make the adjustment, choose the option that works best for you. 

Create a reversing journal entry on December 31

1. Credit Vacation expense and Debit Vacation Owed.
2. Follow the steps above to Adjust the Vacation Owed amount for each employee. 
   • Start with January 1 for each employee 

Post all prior paycheques properly to update the YTD

1. Delete all the journal entries.
2. Post all the prior paycheques since January 1 to update the YTD.

 NOTE: If you need to adjust the vacation balance forward, you must adjust it in the previous calendar year's payroll transactions. Make a backup before make adjustments.