LauraAB
QuickBooks Team

Employees & Payroll

Hi readerreit,

 

Great question. The difference between Company Contributions and Other Tax is as follows.

 

Company Contribution is used for company-paid benefits and expenses, such as health or life insurance or company contributions to an employee pension plan. Often, this is used when there are two sides to a payroll item — an employee side and a company side — with this one set up to pair with the employee's contribution.

 

An Other Tax item is used for additional taxes taken from each pay cheque. During set up, you choose from "tax is paid by the employee" or "tax is paid by the company," and go from there. The reason Other Tax was suggested for the Employer Health Tax is because it is a tax.

 

If you're still not feeling sure which you should go with, consulting with an accountant is a great place to start. That way you can be sure you've got your payroll items set up correctly.

 

Let me know if you have more questions!