Payroll

Thanks for reaching out with your question, @missmissySEI.

If you plan to help your employee with medical bills by giving them a bonus (rather than paying for health insurance directly), and you want taxes withheld from that bonus, you can generally handle it the same way as your existing quarterly bonuses in QuickBooks Desktop 2024 Pro Plus.

Since this bonus will be considered taxable income to your employee, make sure to enter it as a payroll bonus. This ensures that QuickBooks calculates and withholds the applicable taxes properly. Also, you don’t need to set up anything differently in QuickBooks specifically for this type of bonus.

However, if you decide to offer a company-paid health insurance plan in the future, you would need to set up appropriate payroll items for benefits or insurance deductions, depending on how your insurance premiums are handled. QuickBooks supports the following health benefits:

• Section 125 plans (taxable or pre-tax Cafeteria benefit plans)
• Taxable, pre-tax, or company HSA Plans
• Dependent or Medical Expense Flexible Spending Accounts (FSA)

Once you know the details of the insurance benefits from your provider, follow the steps below to add a payroll item for medical, vision, or dental insurance. Here’s how:

1. Open the Lists menu and select Payroll Item List. Then click the Payroll Item dropdown and choose New.
2. Select Custom Setup and click Next.
3. Choose Company Contribution and click Next.
4. Enter the item name (e.g., medical, vision, or dental) and click Next.
5. Add the liability agency and account number, then click Next.
6. Set the Tax Tracking Type to either Premium Only/125 (pre-tax) or None (after-tax).
7. Click Next three times. If using None, select Net Pay in the Gross vs. Net window and click Next again.
8. Leave the Default Rate and Limit fields blank, as these can be added later in the employee profile.
9. Finally, click Finish.

For more detailed guidance on setting up and managing payroll items for insurance benefit plans, refer to this article: Set up and manage payroll items for your insurance benefit plan.

We’re always here to help you if you have any other concerns.