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Level 1

Taxable Benefit

Group Insurance as a Taxable Benefit. Should the part paid by the Employer appear on T4?

If yes, may I please get some help as to how it should be set up?

1 Comment 1
QuickBooks Team

Taxable Benefit

Hi there, 


Setting up a Taxable Benefit can be a lengthy process but I'll be to break it down for you. 


The best way to set up a Taxable Group Benefit in QuickBooks Desktop is to set up a Payroll Item as a Company Contribution.



Let's create the Taxable Group Benefit Payroll Item, to do this:


  1. Click the Lists menu.
  2. Select Payroll Item List.
  3. On the bottom left corner, click on Payroll Item and select New.
  4. Select Company Contribution, and click Next.
  5. Enter the name (for e.g. Maternity Leave), click Next and then Finish.
  6. Select the name of the agency to which the liability is paid from the drop down, Enter the number that identifies you to the agency, Select Liability Account (company-paid) and Expense account, click Next.
  7. In the Record of Employment (ROE) tracking, select Earnings and In which they are paid and select Next.
  8. In the Tax tracking type, select the applicable Tax Tracking box for T4.
  9. Select applicable Taxes to this Payroll Item, click Next
  10. In the Calculate based on quantity screen, select Neither.
  11. Type the percentage or amount for the Other Tax and select a limit type if it needs to be reset each year or one time occurrence, click Finish to save.


 After the Payroll Item is created, you have to apply that to the applicable employee(s). To do this:


  1. From the top menu bar, select Employee then Employee Center.
  2. Select the employee that you need to add the Payroll Item.
  3. From the Payroll Info tab, select the Additions, Deductions and Company Contributions section.
  4. In the Item Name column, select the Payroll Item that was created previously from the dropdown.
  5. Click Ok to exit the Employee Payroll Information screen.


Once the Payroll Item is added to the applicable employee(s), it will automatically appear in the Company Summary section when you create a paycheque.

By default, QuickBooks Desktop will only allow you to select one Tax Tracking box at a time. Unfortunately, you cannot select more than one at this time. You can create the item and manually calculate then change it within the T4 to whichever applicable Tax Tracking boxes.

Here on the Community, we're here to assist you with how the QuickBooks software works. Other members in the Community are welcome to respond. However if you're unsure of which Tax Tracking box or Taxes to select for the Payroll Item,  my recommendation is to speak to another accounting professional such as a tax specialist, for how to handle taxes and how to address it. 


In case you have other questions, feel free to contact our support team using this link here.


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