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MPLS213
Level 2

I have searched far and wide and have not found a similar discussion. Seems so simple, yet I can't figure it out. Appreciate the help!

 

I have an S-Corp with 2 owners and 1 employee.

I have QuickBooks Online Simple Start and QuickBooks Self Service Payroll.

 

Profit and Loss Statement is showing my full Health Insurance Expense AND Company Contribution: Health Insurance. I am not sure if I should set up a wash/reimbursement within an Expense account or if I should use liabilities/assets.

 

  1. Employer pays health insurance bill on 1st of Month for the remaining month.
  2. Record it as an expense under Health Insurance.
  3. 5th & 20th of each month, employee is paid and deduction is made reimbursing the 1st of month expense. Employer contribution is recorded on payroll.
    1. Employee's pay deducted for half of the her own insurance expense.
    2. Employer contributes half of the employee's expense.
  4. Employee's deduction is not displaying in Profit and Loss (i.e. it's not reducing the Health Insurance Expense).
  5. S-Corp Owners on Payroll DO NOT have any contributions/deductions recorded. Accountant said it's easier to not have that on the payroll to account for it at end of year.

Therefore, I believe, there should be three categorizes:

Health Insurance Expense

Company Contribution at Payroll time (which reduces Health Insurance Expense)

Employee's Deduction at Payroll time (which reduces Health Insurance Expense)

 

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12 Comments
john-pero
Community Champion

We use just Health Insurance Expense for the payment as a total, then use payroll deduction to post to same expense account, reducing the company deductible cost. We are LLC, not S-corp so I do not know if any of what you provide in insurance is a taxable to employee fringe benefit.  On our system the employee contribution reduces their income subject to SS/Med by the amount of the deduction.  You are not making an employee contribution unless you are giving the employee money to pay the insurance on their own.

MPLS213
Level 2

There is no option for Employee Deduction to post to an Expense account.  Under Settings > Payroll Settings > Preferences, I scroll down to "Other Liability & Asset Accounts" where the Health Insurance Premium is located. It only lists Liability accounts so the Employee's Health Insurance Payable grows. 

 

Similarly, Company Contributions only have Expense accounts but the company contribution from each paycheck goes to the same Health Insurance Liability as the Employees Deduction.  So my company contribution automatically duplicates the general health insurance expense.

 

First of Month - I pay full insurance expense

Paycheck  - Employee deducted share of insurance from paycheck, posts to Wages expense account and Insurance Payable Liability account. Company Contribution posts to same Insurance Payable Liability account and to a Company Contributions expense account (duplicating the health insurance expense I paid at the first of the month).

 

Is the only option to do a journal entry after every paycheck with the following:

 

Debit Health Insurance Liability and Credit Health Insurance Expense for the employee and company contributions?  Then the main Health Insurance expense account only shows the remaining expense (owner's health insurance). Then under Payroll expense, is has Company Contributions and then Wages (which includes employee's deduction).

 

Then the liability accumulating both 

 

Jennibrown
Level 2

Did you figure this out? I am having the exact same issue and spent 3 HOURS on the phone with Quickbooks Payroll this morning and got no answer. I would love to know if you found a solution! 

Jennibrown
Level 2

Have you found an answer to this? I'm having the same issue and Quickbooks Payroll was no help in resolving it! 

MaryLandT
QuickBooks Team

Thanks for joining this thread and let me provide some insights about the deduction, Jennibrown.

 

Your total payable for the said insurance will accumulate the liability account.

 

Insurance will hit both the liability and expense accounts. When you pay liabilities, they're posted to the liability account to reduce your expenses. 

 

Check out these articles for additional resources:

I'm also adding this article to help you get ready during tax season: Year-end checklist for QuickBooks Online Payroll.

 

Let me know how the call goes by leaving a comment below. I'll be right here to help whenever you need additional information concerning payroll.

Jennibrown
Level 2

The issue is still there where I'm seeing the employers cost of insurance twice on our P&L. My problem is that when I pay the insurance it is coded as an expense (which it is). Then when Quickbooks is running my payroll they are also including the employers portion of the expense on the employees paystub (which they also should). This issue is creating a duplicate of the employers portion of the insurance on the P&L. Can you tell me specifically how the expense should be coded if not as an expense? It needs to be a positive to offset what Payroll is doing.. 

Ryan_M
QuickBooks Team

Hi @Jennibrown,

 

I'll point you in the right direction for support with your query about payroll in QuickBooks Online (QBO).

 

At this point, I suggest you speak with our Technical Support team once again for assistance. I understand you've already contacted them before, but your specific issue requires a closer look, and they have the necessary tools for that. 

 

See this article for the steps: Contact Payroll Support. It includes their hours of operation so you can be sure a support representative is available when you call.

 

If you decide to pay your payroll taxes online, then open this article for the steps: Pay and file payroll taxes online

 

You can tell me if you have other questions by leaving a post below. I'll be sure to get back to you. 

sheera
Level 1

Book your actual insurance expense against your insurance liability account

tchattman
Level 1

Did you ever figure this out?  I tried to call support and they hung up on my (I guess because they couldn't figure it out either).

 

My issue sounds similar:

I have payroll liabilities for the employee portion of the healthcare expense.

I have an expense account for the company contribution that is also tied to payroll. (It will not allow me to make it a liability)

I have an expense account for the vendor where my payments are applied to the vendor.

As a result in my PNL I have "double" recorded my company liability portion of the insurance as it shows in the company contribution expense account as well as the vendor expense.

Is there a some sort of journal entry or something that I should be entering to offset this in someway?  

SashaMC
Moderator

Welcome to the QuickBooks Community, tchattman. For this particular situation, I highly recommend that you contact your accountant to see what is the best approach for your business. If you don't have an accountant, I got you! Quickbooks offers a ProAdvisor service where you can connect with experts around your area. Simply enter your zip code and browse through all our experts. They even offer free consultations. Here's how:

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Please do not hesitate to let us know if you have any questions. This is why my team and I are here to help. I hope you enjoy the rest of your day!

 

Meeddy
Level 1

Did you get your issue figured out.  I am having the same issue.  Thank you so much

112020
Level 2

We are having this same issue !  If Quickbooks Support can't answer the question, how is an accountant going to help ?  Quickbooks provided the specific process for creating the Health Insurance payroll items, so Quickbooks should know how to fix the duplication issue.  Please, there must be some way, and if it's a journal entry, then please show us how ... 

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