Monthly Stipen

Great. That helped alot. One more question.

Payroll is every two weeks but the insurance stipen is monthly, by adding here will it take it out every payday or just once a month?

Is the stipend for Medical insurance an Addition or company contribution? Is it taxable income? Is it considered fringe benefits? 

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@HoneyLynn_G wrote:

Great day, @powerboard-deb.

 

Thank you for visiting us today. I can help you add a payroll insurance item on your employee setup.

 

You have the option to assign an additional item for the insurance of your employees. Here's how:

1. Click Employees.
2. Choose Employee Center.
3. Double-click the employee name.
4. Select the Payroll Info tab.
5. Go to the Additions, Deductions and Company Contributions section.
6. Create an additional item for the insurance and enter the amount.
7. Click OK to save changes.

 

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Hi aleffler,

You'll want to set up a stipend for medical insurance as a taxable fringe benefit payroll item. 

Here's how:

1. Click Lists, select Payroll Item List.
2. Click the Payroll Item drop-down arrow and select New.
3. Select Custom Setup.
4. Select either Company Contribution or Addition, and click Next.
5. Enter a name for this item and click Next.
6. Select an Expense account and Liability account from the drop-down lists and click Next.
7. From the Tax Tracking Type drop-down list, select Fringe Benefits and click Next.
8. Click Next twice.
9. Enter that default rate in the first section of the Default rate and limit window if the benefit will be a specific amount.
10. Enter the amount of any limits on the item in the second section of the window. Click Finish.

When you select the item as Company Contribution, this adds the value of the fringe to be taxed but doesn't increase the net pay. On the other hand, if you choose it as Addition, it adds the value of the fringe to be taxed and increases the net pay.

Here's an article for more information: Create Taxable Fringe Benefits Payroll Items.

You can electronically file and pay tax forms in QuickBooks: E-pay 940 and 941/944 Tax Forms.

Reply to this thread if you need further assistance. I'll be right here to help.

If we do it this way, is the insurance amount taxed or not?

Thank you for joining the QuickBooks Community, skrogers. If you are setting up a taxable fringe benefit payroll item (as the agent mentioned above), any fringe benefit you (the employer) provide is taxable and needs to be added to the recipient's pay unless the law states to exclude it. Using this item as a company contribution or addition will result in this on the Federal Forms.

• 940: Increases wages (line 3)
• 941: Increases wages (line 2, 5a, 5c)
• 944: Increases wages (line 1, 4a, 4c)
• W-2: Increases wages (line 1,3, 5; reported in box 14)

Please let me know if you have any more questions. I'll be around to help. Take care and enjoy the rest of your day.

Why doesn't Quickbooks allow you to specify which payroll period that the amount will be taken out? Our previous software did this & it was very helpful. This has too much chance of charging the employee more than once a month for insurance and not realizing it until the employee gets the check and complains.

Hi there, CSI5.

Let me share some information about how insurance deduction works.

Once you've set up an insurance plan item, QuickBooks will automatically include it in your payroll until it reaches the deduction limit. If your employee has already been charged for the month, you can edit the insurance amount on the paycheck to avoid duplicate deduction. Here's how:

1. Select Employees, then choose Pay Employees.
2. Choose a check type.
3. Select the appropriate schedule in the Create Paychecks section, and click Start schedule Payroll.
4. Verify the pay period end date, check date, and bank account the money is drawn from.
5. To see everyone's paycheck details, select Open Paycheck Detail.
6. Change the amount of the insurance to zero.
7. When the checks are ready to be created, select Continue.
8. Check the amounts for each employee, then click Create Paychecks.

 I can understand why you’d want to have this option, though, especially if you’re only deducting your employee once a month. At times, we roll product updates based on our customers' requests. Rest assured, I'll take note of your ideas and suggestions to improve your QuickBooks experience.

Lastly, here's an article that you can read to help track where your business stands in terms of employee and payroll expenses: Customize payroll and employee reports.

If I can be of any additional assistance, please don't hesitate to add a comment below. Stay safe and have a great rest of the day.

How would I setup a hotel stipend that's paid once a month for a biweekly pay period?  The same way?

Thank you

Yes, T Morrison, you can set up your monthly stipend the way HoneyLynn_G laid it out. 

You can add Insurance to the employee's payroll information and the system will automatically add the payroll item. You have the option when you'd want to pay the monthly stipend. Just zero it out to avoid duplicates. 

Feel free to use these links for your reference: 

• Set up employee
• Create taxable fringe benefits payroll items

Please don't hesitate to post your questions here. Take care and stay safe!

We will be starting to pay a stipend to our employees for business use on their personal cell phones.  According to the IRS, it is non-taxed.  Would I set up the stipend in this section?  

Hello there, @Jeannieat.

Yes, you'll have to set up the stipend for your employees so you can keep your financial data accurate and updated in QuickBooks Desktop (QBDT) Payroll. Let me share some insights about this, and guide you on how to record one accordingly.

When a stipend is a non-taxable payment, you'll have to record it as reimbursement to your employee. This type of payment doesn’t appear on any of your payroll tax forms. For the complete guidelines, please check the Employee business expense reimbursements section of IRS Publication 15, Circular E — Employer's Tax Guide.

You can start the setup process by creating a reimbursement item. Here's how:

1. Go to Employees, and select Manage Payroll Items.
2. Select New Payroll Item.
3. Choose Custom Setup, then select Next.
4. Select Addition, then select Next.
5. Enter the name of the Reimbursement item. Select Next.
6. Select an expense account for tracking this item.
7. Set the Tax Tracking type to None. Then select Next.
8. Under Taxes, none should be selected. Select Next.
9. For amounts paid per mile/kilometer, select the Based on Quantity checkbox. Then select Next.
10. Choose to calculate on Net Pay and select Next. Then, enter a Default Rate, then select Finish.

Once you're done, add the reimbursement item to your employee’s record. Then, run payroll with the reimbursement amount. 

You can see this article for the step-by-step guide: Reimburse your employee.

Also, a variety of payroll and employee reports can help you manage payroll and keep track of employee expenses in QBDT. You may want to check out this article as your reference to guide you in customizing them to get the data you need: Customize payroll and employee reports.

Please feel free to leave a comment below if you have other payroll concerns or questions about managing employee transactions in QBDT Payroll. I'm always ready to help. Take care, @Jeannieat.

Hi,

Thank you for this answer, however, the company decided not to make the stipend non-taxable after all.  Would I just set it up as a new Payroll Item as a bonus so it doesn't affect PTO but it will be taxed?

I have another question.

We discovered that Holiday Pay is being taken out of PTO.  So my work around is to go into each employee, add the 8 hours for the holiday pay to their available PTO, then create a separate pay check, mark the do not accrue box. We also discovered that when we are paying PTO hours on the regular pay check, the PTO hours are being added AND subtracted from the PTO available hours. So on the check with Holiday Pay, I also add the PPTO.

Could I set up the Holiday Pay as an additional item, have it taxed but not have it affect PTO? 

Thanks for your help!!

Hello there, @Jeannieat. Thanks for getting back to the thread.

Allow me to assist you with your payroll items in QuickBooks Desktop. For questions one and two, you can add an additional item and specify whether or not the item is taxable. Here's how:

1. Select Payroll Item List from the Lists menu.
2. Click Payroll Item, then New.
3. Select Custom Setup.
4. Click Next in the Select Setup Method window.
5. Choose Addition, then Next.
6. Enter the name of the new Addition payroll item in the Enter Name For Addition field of the Name Used In Paychecks And Payroll Reports window.
7. Enter the necessary information, then click Finish.

Follow the on-screen instructions and make sure to choose the correct Tax tracking type to get the accurate forms by clicking the dropdown. It also determines how the payroll item will appear on tax forms.

I've included these articles to provide additional guidance in managing your payroll items.

• Edit a payroll item in QuickBooks Desktop.
• Edit payroll items used on paychecks.

Please get back to us if you have further questions with your payroll items in QuickBooks Desktop. We're available 24/7. Keep safe!

Additional question re:  health insurance stipend set up as payroll item Addition (Fringe Benefit) - 

This works great until you also have 401(k) contributions.  The insurance stipend is added to gross, but the 401(k) calculates on gross without the stipend and I believe it should be included.

Is there any other way to add health insurance stipend pay to employees gross wages AND have that amount included when calculating the amount to contribute to 401(k) for both employee and employer match?

Hello there,

I'd appreciate it if you could provide us with the specifics of the sample paycheck. You may attach a screenshot and can hide the personal information of your employee. This way, we could determine the best solution appropriate for you.

For additional QuickBooks-related concerns, don't hesitate to post them here in the Community. We're always available and willing to lend a hand to your queries. Have a great day ahead.

Hi, I'm running into this problem too.  Did you find a workaround? 

Welcome to the QuickBooks Community, @angharad2.

For me to come up with the best resolution for you, can you please provide additional information about your concern? What are you trying to achieve within the QuickBooks Desktop program?

Also, it would be great if you could include some screenshots so I can get a better understanding of it. Any additional details could help us give the best resolution to your issue.

Please know that the Community forum is always open to help you with any QuickBooks concerns you may have. Have a good one!