QuickBooks is gradually becoming basic needs for every business whether it is manufacturing, management, construction, etc, every business is depending on QuickBooks because of its features and tools. It provides you the tools and advances information and the best part anyone uses it very easily. Today’s topic will cover the settings of the fringe benefits in QuickBooks.
What is Fringe Benefit?
It is a type of employee compensation that has special payroll reporting requirements. Fringe benefits range from cash, like clergy housing, allowance, or non-cash benefits such as allowing a company employee to use a company car, etc.
|Cash Fringe Benefits||Increases Net Pay||Other Information|
|S Corp owner Health Insurance||No||Subjected to federal and state withholding taxes|
|Company HSA contribution||No||Taxable in some states|
|Personal use of company car||No||Taxed as regular wages|
|Group Term Life Insurance||No||Taxable|
How to add Fringe Benefits to your pay types
Before reporting or adding a fringe type on a paycheck, it should enable the fringe benefit inside the employee profile.
Set up a Taxable Fringe Benefit Payroll Item
Simply follow the below points and set up the fringe benefit payroll item:
- Go to the main menu>>List >>Payroll Item List
- Click on Payroll Item option and click on New
- Choose Custom set up
- From Company Contribution choose an option or Addition
- Click on Next
- Company Contribution – Choosing this option will include the fringe benefit value to be taxed but the net pay doesn’t increase
- Addition – Selecting this option will include the fringe benefits value to be taxed and increases the net pay as well
- Mention a name for the item and click on Next
- Select the Expense account and Liability account from the drop-down menu
- From Tax Tracking type select Fringe Benefits and click on Next
- Click on Next again
- In the first section of the Default rate and limit window, enter the default rate if the benefit is a particular amount.
- In the second section of the window, enter the amount of any limit on the item
- Click on Finish
Once the payroll item is created, select a suitable scenario of how the fringe benefit will be paid to the employee.
- If the amount is added on a paycheck with regular wages for the taxes to get offset provide the amount in the Other Payroll Items by using the Fringe benefit. You don’t have to add any other deductions because the amount is not included in the net check. the only tax is calculated
- If the employee won’t receive any future wages for the current year, and the employer has to pay the taxes. Select Addition, and compensation, for a Tax Tracking. Select the payroll items to check the gross
- If the employee didn’t get any wages in the coming year and the employer will provide the tax amount to the employee. You need to click on the Addition button and for tax tracking select None. The employee needs to pay back this amount to the employer in the time duration.
How to contact?
For more information, dial QuickBooks support phone number +1844-313-4856 and get your queries resolved. QuickBooks Support executives are available 24*7 to support you with all the queries and issues. QuickBooks Experts are professional, polite, and having a massive experience, additionally, they are always eager to help you with complete satisfaction. You can also email at email@example.com and soon one of the technicians contacts you with the solution.