When following these instructions to set up an employer's contribution for 3% top-heavy contribs to a 401k plan-
If we use the % method as mentioned in step 6 below - does 'gross pay' include the amounts that we are adding to an employee's payroll check for Excess Group Term Life Insurance > $50,000? Or does QBO Payroll not include this item in the calculation because it is not paid to the employee?
Thanks in advance-
QuickBooks Online Payroll
SelectWorkers, then selectEmployees.
Select the employee's name.
Select theedit (pencil) iconbesidePay.
Select theedit (pencil) iconin the Deduction section to add a new item.
SelectDeduction/contributionon the drop-down. Select the next drop-down. Then select theContribution type. Provide the description you want to appear on the check.
On the drop-down, select$ amountor% of gross pay. Enter the amount or percentage rate.
If you want to specify an annual maximum amount for company contributions, enter the amount in theAnnual Max field.
QuickBooks Online (QBO) will calculate the contribution. However, the employer contribution will not show up in your employees’ paycheck. This is only visible to the employer side when setting up a company contribution.
401k contribution consists of employee-paid and employer-paid portions. The employer will not be included in your employee's gross wage as it is added on top of the paycheck paid. The employer portion is exclusive to the employee's gross wage calculation in QBO.