health insurance deductions

Hello brookeanne,

Health insurances can be track within QuickBooks by setting up a payroll item. Then, you can assign it to the employee and include it when you run payroll. It is easily set up by following these links:

• Set up a payroll item for an insurance
• Set up a Section 125 Health Insurance (Cafeteria Plan)

After running payroll, you can pay your liabilities. With that process, you visit these links for reference:

• Get started with Payroll
• Pay and file your payroll taxes online

Aside, you can also ask your accountant if there is another process that they can suggest. They know what's best for your books.

Keep us posted if you have additional questions.

@brookeanne I find that semi-monthly payroll works best for all of my clients. This is with payroll periods ending on the 15th and EOM.  Then there are always two pay periods each month so total of 24 vs. 26.

This makes it much easier to split monthly premium amounts since you are just splitting them in half.

The payroll item for deduction from employees can post to your regular insurance expense account. Pay the gross insurance and then each pay period a portion is deducted and your overall expense is reduced

@brookeanne @john-pero 

I agree, I normally setup a contra account right below the health insurance expense account, so i can see total company pays and right below that see a credit for the amounts employees' contribute from payroll.

Could you expand on how I would set this type of deduction up....it would make it so much cleaner

Could you expand on how I would set this up? I really like the idea of this way better than using payroll liabilities account. 

Hi @brookeanne -  

Two suggestions:

1) Semi-monthly payroll with timesheet periods ending 15th and EOM (for monthly billing).

Suggest paycheck dates of 10th and 25th, to allow process time, avoid changes for holidays. 

Make sure your system or service provider can handle this change -- Dollar impact is negligible

Make sure your employees know that you are changing these dates for timesheets and paydays

2) In QB, setup contra account below expense account used to pay health insurance, for example, 

Account 6500 - Health Insurance - ER Paid -- Charge here when health insurance paid by company.

Account 6510 - Health Insurance - EE Paid -- Credit here for employee payroll contributions to this. 

This way you see how much company pays in total and how much of that is paid by employees for planning & budgeting purposes as well as for easily seeing if numbers "look proportionally right."

Thank you SOOOO much Teri. Forgive me, but how do I set up a "contra" account? Would it be a "sub account"? 

Ha! ok! Thank you so much Teri! So Helpful!!!!!!