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Level 1

How to do a zero check for Taxable Fringe benefit

I use QB Desktop. The owner paid the braces bill for the employee $2100. It is already paid but I need it to be on the W-2. I have added a Payroll Item for Taxable Fringe benefits. But it has been 7 years since I did this and can't remember how to do a unscheduled payroll for this employee where I gross up the $2100 to include taxes and cut a zero check. I just want to make sure it is on the W-2. The original check was put to employee gift. How to I do a zero check? Thanks


QuickBooks Team

How to do a zero check for Taxable Fringe benefit

Thank you for posting here in the Community, @maryweaver.


I'm here to help you record/zeroed out the check for Taxable Fringe benefit in QuickBooks Desktop (QBDT).


To zero out the check, add a payroll item for taxable fringe benefits and create an offset item and record it under Other Payroll Items.


To create a check for fringe benefits:


  1. Go to Employees at the top menu bar.
  2. Select Payroll Center.
  3. Click on Pay Employees.
  4. Select Start Unscheduled Payroll.
  5. Select an employee and click on Open Paycheck Detail.
  6. In the Preview Paycheck page, go to the Earnings column.
  7. Select an item under the Item Name or click Add new to add the taxable fringe benefits.
  8. Enter the amount under Rate.


After recording the item, it will automatically create a net pay including the amount of taxes next to CheckAmount. To offset the amount, create an offsetting item under Other Payroll Items.


Here's how:

  1. In the Other Payroll Items column, click the drop-down arrow and select Add New.
  2. Select Deduction, and click Next.
  3. Type Net pay offset in the Enter name for deduction window, and click Next.
  4. In the Agency for employee-paid liability window, change the Liability Account to the account affected or correct account.
  5. Click Next.
  6. Select None from the Tax tracking type drop-down list, and click Next.
  7. Make sure that no taxes are selected in the Taxes section, and click Next.
  8. Select Neither in the Calculate base on quantity window, and then click Next.
  9. Select net pay in the Gross vs. Net window, and then click Next twice.
  10. Click Finish. You've now created the offset payroll item.
  11. In the Rate column, enter the amount in the Net pay or ChekAmount field.
  12. Hit the Tab key to step off the Other Payroll Items field. The amount on the Net Pay field in the Employee Summary section should be changed to zero (0).
  13. Make sure that Use Direct Deposit checkbox is not selected.
  14. Click Save and Close.


For additional reference, you may check this: Pay Employees With A Gift Certificate Or Cash Bonus In QuickBooks Desktop Payroll.


After following the steps above, you'll be able to zeroed out the check for fringe benefits. Feel free to add a comment below if you have any other payroll concerns. Have a good one!

Level 15

How to do a zero check for Taxable Fringe benefit

If you set it up as "Other", you cannot use the Gross Up function. This means you would need to manually increase it, which is fine, but not as friendly.


You set it up as a Bonus Type of activity, and as Compensation, and that lists it in the top, so that you can use the Gross Up function here.

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