Suppose if you are running a business and having a firm of around 50 employees, you are required to provide some benefits to your employees. Since a better healthy, happy and satisfied manpower is the secret behind the growth of any business. Hence to keep your employees stay and work for long period for your company with their deep heart, you are required to give them health benefits by some of the contribution that is to be made by employer that is by you and some partial is to be paid by them that is by employees themselves. Now before we proceed towards how to set payroll in QuickBooks for health benefits paid by employees vs company paid, we will discuss in brief what actually contribution and deductions are.
What is Contribution?
The amount that is being borne or contributed by employer or the company on behalf of their employees for their medical insurance in group or in personal is referred to as contribution. Generally 50% of the premium is to be contributed by an employer depending upon the company policy. It is considered to be additional wages or pay and is added in employees overall CTC. We can call the contribution as company paid.
What is Deduction?
The amount that is being borne by employees themselves and deducted from their pay for their medical health insurance in group or in personal is referred to as deduction or employees paid.
Read more about “QuickBooks WorkForce” and “QuickBooks Pay stub Template”
Set up payroll in QuickBooks for health benefits paid by employees and company paid.
QuickBooks has made easy for its users to set payroll for their employees considering all deductions and contributions in their pay slips so as to automatically pay the amount of insurance for health benefits. Now employer is not required to interfere much in creating payrolls and wasting long hours in calculating amount payable manually but QuickBooks software will handle all the tedious task easily.
You are required to follow the below steps in order to set up payroll for contributions and deductions towards health benefits.
- Gear Icon is to be selected thereafter Payroll settings is to be selected.
- Pay schedules is to be selected.
- You may choose first deductions or contributions depends totally upon what you want to select first.
- Add a new deduction or add a new contribution is to be selected.
- Health insurance and other deductions are to be selected from the drop down menu.
- You need to enter the proper information on the basis of deduction and contribution.
- Deduction is to be specified along with its description in case you have selected other deductions.
- Necessary information is to be provided in case you have selected health insurance or retirement plans.
- The type of benefit is to be selected from the non cash taxable benefit.
- Ok is to be selected after filling all the necessary details..
You are now required to follow the steps in order to add employee paid or company paid towards health benefits in QuickBooks Payroll.
One thing is to be kept in mind that you need to enter the details for each and every employee.
For existing employee, the steps are
- Navigate on to employee, now the employee that you want to edit is to be selected.
- Edit option is to be selected thereafter pay is to be clicked.
- Again Edit is to be selected thereafter select an employee for having any deduction.
- From the drop down list, deduction or contribution is to be selected. You can also choose new Deduction/contribution in case new is to be added.
- The type of deduction/contribution is to be selected to ensure its sub-category.
- The name of the provider is to be entered in the box provided. In this way employee’s paycheck or paystub will reflect the amount deducted or contributed.
- Amount paid by employee or company paid amount per pay period is now to be entered. Deduction is to be entered in terms of percentage so as to avoid over deduction and contribution is to be entered in terms of amount pay period.
- Now click on to OK.
In this way you can set up payroll in QuickBooks for the amount contributed by employee and employer for availing the health benefits. In other words, the amount so deducted and contributed to the pay stub of employee can better be accounted by following the above steps so as to make the payment of premium to the health insurance company through QuickBooks automatically.