QBO Payroll Setup. I see how to add deductions, but I cannot see where to add a non-taxable addition. Where can I do that?

Welcome to the Community. I'm here to help you add non-taxable additions to QuickBooks Online Payroll.

To add a non-taxable addition, you need to create a payroll item and then add the amount to the paycheck. Here's how:

1. In the left menu, click Payroll.
2. Go to the Employees tab.
3. On the Employees page, select the worker you're working on to open its profile.
4. Click the Pencil icon for Pay under Employee details.
5. Click the Add additional pay types link under the How much do you pay this employee section.
6. Locate and select the Nontaxable Per Diem Recurring amount.
7. Click on Save, then Done.

You can refer to this article for more information about supported pay types in QBO: Add or change pay types in QuickBooks Online Payroll.

Furthermore, you can visit this article to give a comprehensive list of reports and an overview of what data they display: Run payroll reports.

If you have further questions about adding nontaxable addition, you can comment below, and we'll respond to you as soon as possible.

Per Diem may work, but I cannot change the title to HOUSING EXCL.  Will it show up on the W-2 in box 14?

Allow me to chime in and share information on renaming employee pay types, OMPUMC.

In QuickBooks Online (QBO), renaming some pay types is possible, but changing Per Diem is unavailable. It won't also appear on W2 box 14. Somehow, other pay types, including clergy housing, reimbursements, Employer HSA contributions, and HWB are non-taxable. I recommend consulting with an accountant to determine the best pay type for your situation.

I've also added these articles on how to set up additional pay items and what reported pay types are in W2 Box 14:

• Adding or changing pay types
• IRS Publication 15

When you're ready to pay your employees, check out these articles on how to update pay schedules and run your payroll :

• Set up and manage payroll schedules
• Create and run your payroll

Let me know in the comments if you have further questions about managing pay types in your QuickBooks Online Payroll account. Have a good one.

I tried CLERGY HOUSING (in kind) with one of QB Payroll help personnel, but it was taxed.  Which CLERGY HOUSING in Core is not taxed?

Are non-taxable payroll item "additions" not available in QBO Plus/Core Payroll?  

Thanks for your follow-up response, OMPUMC. Let me share additional input when setting up non-taxable payroll items in QuickBooks Online.

Taxable and non-taxable addition items in QBO are set up similarly in all payroll subscriptions. Thus, these are available in all QuickBooks versions. 

Additionally, amounts entered into Clergy Housing (cash or in kind) items are exempt from your income taxes, but it's subject to self-employment tax and will not affect the net pay. In your case, you may need to review the items added to your employee's paychecks. There might be other taxable deductions and pay types included that are causing this item to be calculated as taxable.

Moreover, it's best to seek detailed guidance from your accounting professional to help you manage employee taxes in your account.

You can also visit these references to help you manage and track employee paychecks and other payroll data: 

• Create and run your payroll
• Run payroll reports

I'll leave this thread available, so you can always reply below for any additional queries when managing payroll items in your account. Let me know anytime, and I'll be around to help. Keep safe and have a good one!

I have worked with QBO Payroll representatives.  They could come up with no way for QBO Payroll to tax part of my employee's payroll and make the other half a non-taxable addition.  It either taxes the whole salary "Clergy House (cash)" or reduces the net pay via "Clergy Housing (in kind)".  QBO has no workable solution to allow taxing half of salary and "adding" the housing half of gross salary tax free to the net pay (like we can do in QB Desktop with housing showing up in box 14 on W-2). QBO recommendation was to force employee to exempt fed & state tax and ask them to pay quarterly estimates.  It appears we will have to abandon QB Payroll.