Consider the example below where an employee works 173 hours per pay period. When you usually do a payroll entry for this employee, the payroll screen would look like the following screenshot.

If this employee takes 20 hours of Annual Leave, and when you want to enter it in the next payroll entry for this employee;

1. Deduct the 20 hours from the total hours for the pay period. So the total number of hours worked will be 153.
2. Add a new Wages and Salary pay item, and select Annual Leave Pay from the pick list. Enter 20 into the Hours field, and the amount will be calculated automatically.

Your screen should now look like the following screenshot.