Question

How to deduct health insurance amount from gross pay which is used to calculate retirement amount

Forum|Forum|2 years ago
June 24, 2024
1 reply
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I recently switched from desktop to online quickbooks. I have run two payrolls since and have discovered an error in the retirement amounts for two employees. These two employees have health insurance added to their gross pay. However, our retirement plan does not allow for the health insurance amount to be included in the gross pay amount for calculation (5% and 4% for each employee). I have been on a couple different (lengthy) phone calls to try to figure out why these numbers were incorrect. Now that I know they are incorrect and after conferring with my accountant, I now need to somehow indicate that health insurance amount should not be included in the gross pay for retirement calculation. I'm guessing its a simple toggle switch or something else but I'm not sure where to navigate to find it. After an hour talking to customer service, they were not able to help and we were disconnected. Please helping. I'm losing my mind.

QuickBooks Online Payroll

J

JorgetteG

It's clear that your recent experience with our phone support team didn't meet your expectations. We are committed to continuously improving our services to offer the best support possible. Your feedback is crucial, and we are dedicated to promptly addressing and resolving your concerns. Thank you for sharing your concern here in the Community, 566295201.

It is essential to streamline your payroll processes, including managing deductions and contributions. Before we proceed, may I ask about how you set up your employee's health insurance?

QuickBooks Online Payroll tax updates are automatic. Once set up, QuickBooks will automatically calculate it based on the taxable wage base and tax rates.

To ensure that the health insurance is set up correctly, let me guide you through the process of deleting and editing payroll deduction items.

Here's how to edit the existing payroll deduction item:

Go to Payroll, then Employees.
Choose your employee.
From Deductions & contributions, select Start or Edit.
Select Edit next to the deduction you want to modify.
Edit the information as needed.
Click Save, then Done.

If there are limitations preventing you from changing or editing the existing payroll item, you may need to delete it and recreate it accordingly.

Here's how to delete the existing payroll deduction item:

Go to Payroll, then Employees.
Choose your employee.
From Deductions & contributions, select Start or Edit.
Select the trash bin icon next to the deduction you want to remove.
Click Delete, then Done.

For additional details, refer to this article: Set up, change, or delete employee-paid deductions.

Once done, you can check this article on how to set up and manage payroll items for health insurance: Set up and manage payroll items for your insurance benefit plan.

Despite your previous interaction with our payroll support team, I would still advise reaching out to them again, as they have additional tools to investigate this issue and perform other troubleshooting steps if necessary.

You can also view your business and employees' information by running Payroll Reports to keep track of your records and ensure accuracy and how payroll taxes are calculated in QuickBooks Online to track and tax it appropriately.

If you have additional questions about setting up payroll deductions or contributions, or anything else, please let me know by adding your comment below. I'll circle back to help you.

5

566295201Author

Thank you for your reply. I have done some additional research and attempted to complete the steps you outlined in your response, but this was not the solution. Here's what happened: First, when the desktop information migrated to online, there was one line item wherein the rules/parameters set up in desktop did not flow through to online. I did not catch this until after a payroll was completed. I noticed some of the numbers were incorrect, therefore I started reaching out to QB customer service SEVERAL times in order to figure out why these numbers were incorrect. Once we figured out what the problem was, no one was able to fix it. I met with my accountant today and he stumbled upon the solution.

Here's my take and my ask for QB to improve this for future as I'm certain I'm not the only one that has had this issue: When the pay type migrated from desktop, the rules/parameters didn't migrate with it. QB online simply set it up as a general pay type so nothing regarding taxes or retirement rules were set up. You cannot look at the rules into how this pay type - or any pay type for that matter - is set up. My accountant went through all the pay types and stumbled upon "S Corp Owners Health Insurance". He added that, put in the amount for the employee and ran a paycheck to see how it would calculate. Again, not seing the rules into how the S Corp pay type would run, he was completely taking a guess to see if it would work. Well, that did it! Much to our surprise, that one pay type has the rules in place so that it doesn't calculate into the gross pay for retirement to calculate the percentage. Not only that, but the withtholdings are now corrected as well. In desktop, you were able to see the rules that go into setting up a pay type where you can tell it what to do to run properly. In QB online, you don't have that option.My ask: improve pay types so that you're able to see the rules and parameters of the pay types AND be able to change them to set them up the way you want to - just like desktop!

This has been an extremely frustrating process. This has taken valuable time, energy and money away from my job and running the office smoothly after this transition. It felt like I would never find the solution and after talking to so-called payroll experts with QB online support, I felt like I had made the wrong decision in converting to online in the first place. The amount of money we pay for subscriptions, the time to learn the new software and to troubleshoot this one issue has been absolutely ridiculous. If you're going to force everyone to use QB online, the least that could be done is to have it so similar to desktop version that it's not so painful to switch. I have literally wasted DAYS of my time talking to customer service, chats, joining the community, joining a facebook group to ask my question, and finally meeting with my accountant who stumbled upon the solution after 30 minutes of trying different pay types.

Please take my suggestion of changing how pay type rules are looked at and make it the norm. I'm sure others are in my situation and have no idea that's why they are having issues. Better yet, if nothing is done to change the pay type rules, please educate your customer service to be better equipped to answer such questions. The Smart Look sharing screen option is great, but when they don't know what they're doing, it makes it very frustrating to sit and poke around and not have the solution in the end. ALSO - one phone conversation, a customer service rep told me I'd have to submit a request for review and it could take 6-8 weeks for it to be reviewed and solution to fix the problem. When dealing with payroll, we don't have time for that!

S

Shania_C

Thank you for providing further details and clarification regarding your concern, @566295201.

I understand how this can disrupt your workflow and cause inconvenience. Rest assured, I'm here to provide valuable insights and guide you toward the appropriate support channels to examine your concern promptly.

Please know that we listen to customer feedback and use it to enhance our services. With that said, let me help you relay your valuable insight to our software engineers so they can review your suggestion and may consider it in our future product updates.

To submit your suggestion:

Select the Gear icon, then choose Feedback.
Type in your product suggestions.
Select Next to submit.

Additionally, I've included a resource for running, printing, and customizing payroll reports. Also, instructions on how to add deductions that your employees need to pay each payday in QuickBooks Online Payroll:

We appreciate your utmost patience while this is being worked on. Feel free to post here anytime if you have other questions with any QuickBooks-related concerns. Have a good rest of the week!

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