How to set up vacation pay

Summary

Set up vacation pay to calculate and accrue vacation in Sage 50 Accounting.

Go to Setup, Settings, Payroll, then Incomes.
Add a check mark to the Calc Vac. column for each income in question.
Select OK.
Select Linked Accounts.
Link a Payable account in the Vacation Owed field and an Expense Account in the Vac. Earned field.
Select OK.
Open an Employee record.
Select the Income tab.
Check the boxes for Vacation Owed and Vacation Paid.
Enter a numeric in the field indicating how much Vacation Pay to calculate.
- This varies, province to province and company to company. Check with the Canada Revenue Agency (CRA) if you aren’t sure what percentage to calculate at.
To retain vacation pay for your employee and pay it out later, place a check mark in the Retain Vacation field.
- Don’t place a check in the Retain Vacation field if you prefer to pay the vacation out every paycheque.
Confirm with the CRA if you’re required to check the Calculate vacation on vacation paid box.
- This isn't a requirement for most provinces.
Select Save and Close.

Now, the Vacation Accrued amount will calculate the percentage of Vacation pay as indicated in the Employee Record.