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M
Mike Petty
April 9, 2020
Question

How to payroll a taxable benefit?

  • April 9, 2020
  • 15 replies
  • 36 views

The set up is: QuickBooks Online Simple Start - Standard Payroll

 

The employee is paid a monthly salary. In addition, we pay for health insurance for the employee direct to the insurance provider. We have registered with HMRC to recover the tax on this benefit through the payroll, starting from 6/4/20.

 

How do I set up a suitable payroll item to deduct the appropriate tax without affecting the gross salary?

 

Mike

15 replies

C
Catherine_B
Level 9
April 9, 2020

Hello there, Mike. 

 

In QuickBooks Online Payroll Advanced feature, we have an option to set up an employees health insurance. While we're unable to do that with the Standard one, we can create a Journal Entry. To do that just click the +New button from the left menu. Then, select Journal entry under the Other section. 

 

I also suggest reaching out to an accountant on what accounts are affected to properly account the expenses and we won't mess up your books. 

 

You can check out these articles that will help us run payroll in both Standard and Advanced, if we wish to upgrade: 

Feel free to drop by the Community if you need more help. Keep safe and take care always!

M
Mike PettyAuthor
April 10, 2020

Catherine

 

Thank you for your response.

 

If I wish to upgrade to the Advanced Payroll option how do I do that? When I go to Account & Settings>Billing & Subscription I am presented with two boxes, QB Simple Start and QB Standard Payroll. Within the Simple Start box there are the options to Upgrade, View Payment History and Cancel Subscription. However, within the Standard Payroll box there is only the option to Cancel Subscription.

 

Do I have to cancel the Standard Payroll subscription to then be presented with the option to upgrade to Advanced Payroll or is there some other procedure?

 

Mike

AlcaeusF
AlcaeusF
Level 14
April 10, 2020

I appreciate you for sharing the options visible on your end, @Mike Petty.

 

I can share what I know about the payroll subscriptions in QuickBooks Online. When upgrading to Advanced Payroll, you have the option to set up deduction categories.

 

You can try the post-tax deduction option for the appropriate tax you want to affect the payroll. In case you need the steps, here's how:

 

  1. Log into your QuickBooks account.
  2. Select Payroll Settings, then Deduction Categories.
  3. To add a new deduction category, select Add.
  4. Enter a name for the deduction category.
  5. Select whether it will be a pre tax or post tax deduction.
  6. Add an external ID and select the NMW/NLW Calculation Impact as required.
  7. Select Save.

Since the option to upgrade is unavailable on your end, please contact our Payroll Support Team. One of them will need to take over and process the upgrade on your behalf.

 

Please follow these steps to get in touch with them:

 

  1. Sign in to your QuickBooks account.
  2. Select the Help (?) icon.
  3. Scroll down to select the Contact Us button and follow the prompts.
  4. You will be able to request a callback or start a live chat with an expert.

 

For more details, please see this page: How to get help with QuickBooks.

 

I've also included some articles in case you need some ideas about setting up deductions, as well as some links about the payroll tasks in QuickBooks Online:

 

Please know that I'm just a post away if you have any other questions. Have a great day ahead.

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