How can I remove front-loaded holiday pay from a former employee's payroll account?

When holiday pay is front-loaded, QBO Payroll assigns the full year's hours to each employee's profile upfront. If an employee is terminated before using all of those hours, QBO still sees the remaining balance as owed and will try to include it in the next payroll run. To remove it, you will need to manually zero out that balance and remove the holiday pay type from the former employee's profile entirely.

Here's how:

1. Go to All Apps, select Payroll, and choose Employees.
2. Click on the former employee's name to open their profile
3. Under the Time off section. Scroll down to the Policies & balances.
4. Find the holiday pay policy, click the three-dots icon under Actions, then select Edit.
5. In the Edit time off policy window, look for the field labeled Current Balance, and manually change it to 0 hours.
6. When finished, select Save.

To remove the holiday pay that is also set up as a pay type on the employee's profile. Here's how:

1. Go to All Apps, select Payroll, and choose Employees.
2. Click on the former employee's name to open their profile.
3. In the Job & pay section. Scroll down to Additional pay types.
4. Find the holiday pay item, select the ▼ dropdown next to Edit, then select Unassign.
5. Select Unassign Employee for this individual.
6. Select Save.

Don't forget to verify their status as Terminated/Inactive under their Employment details so they are removed from your active payroll list and you are no longer billed for them.

Please know that if any paychecks were already run that included a portion of these front-loaded hours, those won't be affected by the steps above; they're already processed.

Additionally, you can run and customize payroll reports in QuickBooks Online to get a closer look at your business's finances.

You can revisit this thread if you need further assistance with your QuickBooks matters.