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christinebetts
Level 2

Cash payment to employee via payroll to cover his healthcare costs

I have an employee who already has healthcare insurance covered.  The company wants to pay a cash sum to the employee via the payroll process to reimburse the employee for his costs.  I tried adding it as a contribution amount but it did not seem to get added into the Net Pay total on the payslip, so did I do something wrong?

2 Comments 2
FishingForAnswers
Level 10

Cash payment to employee via payroll to cover his healthcare costs

@christinebetts  "I tried adding it as a contribution amount but it did not seem to get added into the Net Pay total on the payslip, so did I do something wrong?"

 

Unless they changed the terminology in QBO, contribution amounts typically refer to company contributions, not additions to a paycheck.

 

For instance, State and Federal Unemployment taxes are company contributions; they are not added to or taken away from the paycheck, but the company does pay those taxes in full on the employee's behalf.

 

In short, you would only add healthcare as a contribution amount if the company was paying the health insurance company directly.

 

I'm not familiar enough with this specific situation to provide further advice, except that you'll want input from an actual accountant rather than a customer support representative. A few other users do frequent these boards, so they may weigh in with further advice later.

 

It'll probably need to be classed as an addition rather than a contribution in order to raise their paycheck amount; whether it should be included in their gross income or not is the real question.

christinebetts
Level 2

Cash payment to employee via payroll to cover his healthcare costs

Thank you for the quick response.  I hope an accountant may answer too.  If not, I will try an accountant directly.

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