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Level 2

Partially Refund Health Insurance Premium through Payroll

We received a partial premium refund from BCBSM due to COVID.  We will be passing these savings on to our employees to offset what they have paid/will pay for their monthly premium.


I can reduce their payroll deduction by their refund amount but this doesn't give a good paper trail.  I tried adding a new deduction called "BCBSM COVID Refund" which I planned to run as a negative deduction to offset their normal BCBSM deduction but QB Online will not allow me to run it as a negative amount.


Any suggestions on how to best process this premium refund so that we can clearly show employees it was a refund, offset the pretax deduction, and reflect the correct insurance premiums on record?

1 Comment
QuickBooks Team

Partially Refund Health Insurance Premium through Payroll

Hello, @


You can create a non-taxable reimbursement payroll item. Then, you can use this when you create the employees' paycheck. 


Here's how:

  1. Go to the Workers menu.
  2. Choose Employees.
  3. Select the employee name.
  4. From the Pay section, click Edit.
  5. Under Additional pay, select the Reimbursement checkbox.
  6. Click Edit and enter a recurring amount or give the pay type a unique name (optional).
  7. Click Done.

Once completed, you can Create paychecks using the newly created pay type including the Reimbursement amount.    Also, I'd recommend consulting your accountant. This way, you'd be guided in determining the taxability of your payroll items.


Feel me in if you have additional questions about recording a refund in Quickbooks. I'll be around to help. Have a good one. 

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