You can record a non-cash taxable fringe benefit in QuickBooks Online Payroll by pairing an additional pay type with an after tax deduction. Here's how that process works.
First, create the additional pay type. The pay type you choose will determine how the benefit is taxed and recorded on the T4, so I recommend checking out the taxability of pay types article at the end of this post to help you make your choice. To add a pay type:
Now add the deduction. The deduction offsets the additional pay so the benefit is recorded and taxed, but your employee doesn't receive cash for it. To add a deduction:
You're now set to run payroll with the fringe benefit. If this is a one-time thing for the employee, remember to go back into their settings afterward and remove the deduction.
The custom deduction will always debit a liability account based on the accounting preferences in your payroll settings. You will need to create a transaction outside of payroll to represent distributing the benefit, then credit this liability account to maintain accounting accuracy.
One way to do this is to create an Expense. When you fill out the transaction, set the Bank/Credit account to the account you used to fund the benefit. Then, add the liability account to the line item under the Account column.
To find out which liability account to use, check your payroll settings. Here's how:
Let me know if you need anything else!
How different pay types and deductions affect taxes and T4's: https://community.intuit.com/articles/1278212