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Taxable fringe benefits in QuickBooks Online Payroll

by Intuit Updated 2 months ago

QuickBooks Online Payroll doesn't currently have pay-type settings to properly account for taxable fringe benefits. However, You can account for these pay types through an alternative solution.

Pair a different pay type with a custom after-tax deduction to make sure that the benefit is taxed, but that the paycheque doesn't pay the dollar amount to the employee.

Note: 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.

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