Sage 50 Not Calculating Vacation Pay Issue – How to Fix

Last updated: March 8th, 2024

Sage 50 Not Calculating Vacation Pay: How to Fix

Sage 50 Not Calculating Vacation Pay Issue

Vacation pay is a crucial feature in Sage 50 that calculates an employee's earned vacation time during a pay period and either adds it to their paycheck or holds it for later use when they take time off. However, sometimes this feature can stop working, causing vacation pay to not be calculated properly. This can lead to confusion and frustration for both employers and employees.

In this article, we'll walk you through a step-by-step process to get your vacation pay feature back up and running smoothly in Sage 50. We'll also provide some additional context and examples to help you better understand how vacation pay works and why it's important.

Why is Vacation Pay Important?

Vacation pay is a critical part of employee compensation. It allows employees to take time off from work to rest, recharge, and attend to personal matters without losing out on pay. This is not only good for employee morale and well-being, but it's also required by law in many jurisdictions.

For employers, properly calculating and tracking vacation pay helps ensure compliance with labor laws and avoids potential legal issues. It also helps with budgeting and financial planning, as vacation pay is a significant expense that needs to be accounted for.

Common Causes of Vacation Pay Issues in Sage 50

There are a few common reasons why the vacation pay feature might stop working in Sage 50:

  • Incorrect settings in the payroll setup
  • Outdated or corrupted software
  • Inconsistencies in employee records

Fortunately, these issues can usually be resolved relatively easily with a few adjustments in the software.

Step-by-Step Guide to Fixing Vacation Pay in Sage 50

Follow these steps to get your vacation pay feature working again:

  1. Go to the Setup menu and select Settings.
  2. Click on Payroll and then Incomes.
  3. Check the Calc Vac. column for each income type that should have vacation pay calculated.
  4. Click OK to save your changes.
  5. Go back to the Setup menu and select Settings again.
  6. Click on Payroll and then Linked Accounts.
  7. In the Income section, make sure that a Payable account is linked to the Vacation Owed field and an Expense Account is linked to the Vac. Earned field.
  8. Click OK to save your changes.
  9. Open an Employee record and select the Income tab.
  10. Verify that the Vacation Owed and Vacation Paid options are checked under income.
  11. Enter a number to indicate how much Vacation Pay to calculate.
  12. If you want to hold vacation pay for later use, check the Retain Vacation box.
  13. Click Save and Close.

Repeat steps 9-13 for each employee as needed.

Additional Tips and Considerations

  • Always make sure your Sage 50 software is up to date to avoid bugs and ensure you have access to the latest features and fixes.
  • Regularly review your payroll settings and employee records to catch any inconsistencies early.
  • Keep detailed records of vacation time earned and used for each employee.
  • Communicate your vacation pay policies clearly to employees to avoid confusion.
  • Consider using the accrued method for vacation pay (calculating based on a percentage of hours worked) rather than the "as earned" method (giving a set amount each pay period). This can help avoid overcompensating new hires.


Q: What happens if I forget to check the "Retain Vacation" box?

A: If you don't check this box, vacation pay will be added to the employee's paycheck when it's calculated rather than being held for later use. You can always go back and adjust this setting if needed.

Q: Can I adjust an employee's vacation pay rate?

A: Yes, you can adjust the vacation pay rate for each employee individually in their employee record. Just enter the desired percentage or amount in the "Vacation Pay" field.

Q: What if I'm still having issues after following these steps?

A: If you continue to have problems with vacation pay calculation after following these steps, you may need to contact Sage 50 support for further assistance. They can help troubleshoot any software issues or guide you through more complex setup processes.

Properly setting up and managing vacation pay in Sage 50 is essential for ensuring your employees are compensated fairly and your business stays compliant with labor laws. By following the steps outlined in this guide and staying on top of your payroll settings and records, you can avoid common vacation pay issues and keep this important feature running smoothly. Protection Status


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