When Employees pay a portion of their health insurance premium, their payroll taxes are less, (thus the pro-rata employers payroll taxes on that check are less) due to the fact that the insurance deduction decreases their Gross Payroll amount, and payroll taxes are calculated based on Gross Payroll number. However, if the Employer is paying 100% of the employee insurance premium, can the total amount of each employee premium somehow be noted as a payroll item, and although the Employer is paying it, deduct the premium amount from the Gross Payroll amount, to allow employer to still enjoy that decrease as well? Are Employers allowed to decrease the Gross payroll amount, based on Ins. premium amount, as we do when employee pays a portion, is that allowed? It seems unfair that if Employer is paying the full premium, we do not get that reduction in payroll tax on each check, as well, that both Employer and Employee enjoy, when the Employee is contributing? So, I guess two questions.. When employer is paying 100% of health insurance premium, are we allowed to still calculate our portion of employer payroll taxes based on a lower Gross payroll number, based on the amount of premium paid? If we are allowed to reduce in that way, is there a Quickbook payroll item that will somehow give the Employer a similar pro-rata reduction in the Employer share of the payroll taxes? Although the tax reduction is marginal, when we reduce the employee gross payroll when Employee contributes, with many employees, that little amount of reduction can add up, it seems we should not have to forfeit that reduction if Employer is paying 100% of health insurance premium costs. Forgive the question, I am not a bookkeeper or CPA, I am just a business owner trying to figure out how to best, and legally, benefit fairly from paying 100% of insurance expenses, which are so high for a small business owner to cover today! I do not know how the business can claim that huge expense and enjoy some kind of credit on payroll taxes. Would appreciate any guidance out there!
