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D
destiny9
January 15, 2024
Question

How do I set up a per pay period payment to an employee to reimburse him for their self-obtained and paid health insurance?

  • January 15, 2024
  • 1 reply
  • 0 views
I have an employee who chooses their healthcare plan (outside of our company).  We reimburse him for the total for the year, divided out by our 26 pay periods.  I had set this up as a "contribution."  It DID show on his pay check stub as a contribution but it did NOT show up in his gross/net pay.  Did I set it up incorrectly?

1 reply

Nicole_N
Nicole_N
January 15, 2024

I can help you set up a pay period payment to your employee in QuickBooks Online (QBO), destiny9.

 

First, let's create a reimbursement item to reimburse the employee. I'll guide you on how:
 

  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Scroll to the Additional Pay Types section and select Reimbursement.
    • If there's an existing reimbursement pay type, you can add a new one in the Common Pay Types section dropdown. Just select + Another Reimbursement type to add new.
    • You can add the default amount or leave it blank, and just enter the amount as you run payroll.
    • You can also rename this pay type. To rename, select Edit ✎ next to Reimbursement.
       
  5. When you’re finished, tap Save.

 

Then, when creating a paycheck, enter an amount in the Reimbursement field. Follow the process in this article: Create and run your payroll.


Moreover, I'm adding this article you can use in the future in case you want to set up pay schedules in QuickBooks: Set up and manage payroll schedules.


Stay in touch if you have any more questions about setting up pay period payments in QuickBooks. The Community team is here to assist.

D
destiny9Author
January 15, 2024

Thank you for your reply.  

 

Can you explain the difference between a contribution and a reimbursement?

 

Also, in reading the reimbursement article, it states reimbursement is to pay back an employee for "business expenses".  What I am paying the employee for is NOT a business expense.

I
Irene R
January 15, 2024

Hi there, Destiny.

 

Let me provide some information regarding the contribution and reimbursement in QuickBooks Online (QBO). 

 

In QBO, a contribution refers to a company's payment towards an employee's retirement, health insurance, or charitable donations. These payments are tax-exempt but reported on certain payroll tax forms.

 

On the contrary, a reimbursement is a payment made to employees to compensate them for out-of-pocket business expenses. This payment is not taxable and does not appear on any payroll tax forms. If you need to reimburse a personal expense, you can easily record it as a check or expense in QBO.

 

If the company reimburses the expense, it is still considered a business expense. Therefore, you can follow the process shared by my colleague earlier. Alternatively, I recommended consulting with your accountant to ensure the proper recording of the account on your end.

 

You can check this article to know about inviting your accountant to your QBO account: Add accountant users in QuickBooks Online.

 

Let me know if you have additional concerns about QBO reimbursement by leaving a comment below. I'll be here to assist you. Have a good one!

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