Setup Health Insurance in QuickBooks Payroll

How to Set up Set up health insurance contributions and deductions in QB Payroll

QuickBooks Payroll Software has eased the way payroll activities are compiled and completed within small to medium sized business organizations. These complex tasks take hours and hours of time to get streamlined and completed if done manually, but with QuickBooks Payroll in hand user can now get rid of wasting hours over these tedious but imperative tasks as the software automatically handles payroll tasks without much interference from the employer.

QuickBooks Payroll helps to prepare salary and pay slips of the employees without any fuss consisting of many different heads and sub-heads. One such head is about Health Insurance – its contributions and deductions.

User can easily setup deductions under paycheck for their employees in order to automatically pay for the health insurance plan. User can also setup for contribution by the company towards the Health insurance plan as well for which user needs to follow steps highlighted below:

Total Time: 10 minutes

  1. Step One

    Open your software and locate Employees option from the menu bar in the left side of the window.

  2. Step Two

    Select the employee for whom contribution needs to be made and then click on Edit option.

  3. Step Three

    From the new window, select option stating – ‘Does this employee have any deductions?’ followed by clicking on the icon in shape of pencil for edit function. Alternatively, user can also select the option of ‘Add a new Deduction’ in order to add.

  4. Step Four

    From the drop down menu of Deduction / Contribution – select the option labeled New Deduction / Contribution.

  5. Step Five

    Next click on Health Insurance tab from the drop down menu of Deduction / Contribution Type.

  6. Step Six

    In the next window labeled Type, click on anyone of the following options:
    💠 Vision Insurance
    💠 Medical Insurance
    💠 Dental Insurance

  7. Step Seven

    Next step is to provide a label in the form of name and description of the Health Insurance plan.

  8. Step Eight

    Now in Amount per Pay Period click on either $ amount or percent of the total of gross pay followed by putting in the actual amount or percentage needed to be contributed. User can edit the amount while generating the paycheck.

  9. Step Nine

    Furthermore, user can also mention the actual annual amount of deduction employee can opt for or the company will contribute.

Types of health insurance plans & Premium in QuickBooks Payroll

Lastly, user needs to narrow down the option of taxing the premium amount and saving the given information. Payroll taxes are tricky business and thus to avoid any sort of penalty user should narrow down to one type of premium from the following options:

  • Pre-Tax Insurance Premium – This option is selected in scenario wherein the premium amount is deducted from the gross pay / salary of the employee. This premium is shown under W-2 form of the employee as part of Employee Pre-Tax Contribution checked under Box 12 without being included in State and Federal Wages. However, if the pretax contribution of the employee is taxable at local or state level, then it will be shown as part of taxable wages.
  • Taxable Insurance Premium – This option is clicked in terms of the premium amount being deducted out of the Net salary of the employee. They are not selected under Form W-2.

Once the appropriate option is chosen for premium amount the process will get completed by selecting OK option. The moment Health Insurance Deduction / Contribution is set for one employee; same process can be followed for other employees.

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