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Taxable fringe benefits

SOLVEDby QuickBooks19Updated January 04, 2023

QuickBooks Payroll does not currently have pay type settings to properly account for taxable fringe benefits.

You can account for these pay types through a workaround in QuickBooks. Pair a different pay type with a custom after tax deduction to make sure that the benefit is taxed, but that the paycheques does not 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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