vacation is wrongly accruing on vacation and holidays and PTO

QuickBooks Online Payroll automatically calculates vacation accruals based on all paid hours, including regular work, holidays, sick time, and PTO. You will need to manually adjust employees' accruals if you want to exclude non-working paid hours so that only actual worked hours count toward vacation.

You can also do this on the preview screen before submitting payroll. Subtract any hours accrued from non-worked time such as PTO or holidays, and override the total accrual amount.

Comment below if you have further inquiries about setting up QuickBooks time off.