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Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

 
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Best answer January 29, 2020

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Highlighted
Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

I figured it out.

From section 5 in pay section of each employee, select "add new deduction", under deduction/contribution select "new contribution/deduction" again! Then under c/d type: select health insurance, type: medical insurance, enter provider or whatever you want it to say on pay stubs, select amount for employee, employer then select taxable or pre-tax and OK!

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QuickBooks Team

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

Let me help you in setting up the Section 125 cafeteria benefit plans, Sibyl.

 

With this plan, your employees can pay medical, dental, and vision insurance premiums with pretax paycheck deductions. You follow the steps below in setting this up:

 

  1. Select Workers from the drop-down menu.
  2. Click the Employees tab.
  3. Choose an employee from the list.
  4. Click the Edit ✎ icon (next to Pay).
  5. In section 5, select + Add a new deduction.
  6. Select Health Insurance from the Deductions/contributions ▼ drop-down menu and Medical Insurance for the Type.
  7. Choose $ amount or % of gross pay and enter the $ amount or percentage from the Amount per pay period ▼drop-down.
  8. Do the same for the Company-paid contribution if applicable.
  9. Click OK, then hit Done.

I encourage you to visit this link to learn more about how this health insurance plan work in QuickBooks: Section 125 cafeteria plans.

 

Here's an article that will help in confirming an employee's wages and benefits for year-end reporting: Year-end Reports Employee wages and benefits reports.

 

Fill me in if you have any other concerns or further questions about deductions and contributions. The Community will always have your back.

Highlighted
Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

Please share how to properly set up the "Existing Deduction" that I am to select from the contribution/deduction drop down list.  FYI  I do not want the information to be printed incorrectly on the W-2s. This is for a pre-tax health and medical insurance plan and NOT an HSA.

Highlighted
QuickBooks Team

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

Let me walk you through in settings up your Pre-tax Health Insurance, Sibyl.

 

Here's how:

  1. Go to the employee's profile. 
  2. Select on the employee and go to section 5, click + Add deduction link.
  3. Select these options from the drop-down: 
      - Deduction/contribution or garnishment: Deduction/contribution
      - Deduction/contribution type: Health Insurance
      - Type: Medical Insurance
  4. Enter the provider and the amounts for Employee and Company-paid fields. 
  5. Select Pre-tax insurance premium.
  6. Click OK

Once you've run payroll the insurance is deducted from the employee's gross pay before Medicare, Federal, and State taxes are calculated. 

 

I'll be here if you need more help.

Highlighted
Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

Do you mean section 4?  Health Insurance is not an option in the drop down list.  Please follow your own instructions to make sure it works before posting them. It's very frustrating when they are wrong. 

Highlighted
Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

I meant to say, did you mean section 5?

Highlighted
Level 3

How do I set up a 125 Cafeteria (PreTax) health insurance deduction and company contribution in QuickBooks Online?

I figured it out.

From section 5 in pay section of each employee, select "add new deduction", under deduction/contribution select "new contribution/deduction" again! Then under c/d type: select health insurance, type: medical insurance, enter provider or whatever you want it to say on pay stubs, select amount for employee, employer then select taxable or pre-tax and OK!

View solution in original post

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