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highlands001
January 24, 2024
Question

Medical Insurance Pay does not Show on Net Pay

  • January 24, 2024
  • 1 reply
  • 0 views

Hi everyone, newbie here.

I just started my S-corp (single member llc based.) I just run payroll for the first time and decided to pay myself medical insurance premium (that I have been paying out of pocket) as part of employee additional compensation (company contribution) within that same paycheck. Nonetheless, gross pay and net pay DO NOT include the medical insurance pay in the final number in the paycheck.

I my case, gross pay (wage) is $500, taxes withheld $60, medical insurance is $150, but the net pay is only $440 ($500-$60) instead of ($440+$150= $590.) Even though the report says total payroll expense is ($500+$50+150)= $700.

Anyone have any clue why?

Thank you.

 

1 reply

JenoP
JenoP
January 24, 2024

Good day, highlands001. I'd be happy to provide some clarification about why the net pay is not reflecting your payroll contribution.

 

When a payroll item is set up as a company contribution in QBO, it does not get included in the gross or net pay calculations. Only regular wage items, additions, and deductions will affect the employee's net pay amount.

 

Company contributions are handled separately from the employee's earnings and withholdings. The contribution amount also comes directly out of your company's payroll account. This is why it's added to the total payroll expense reporting. 

 

Let me also share these articles for additional guidance and resources with more information on company contributions and understanding gross vs net pay::

 

 

Please don't hesitate to ask any additional questions or submit new inquiries if you require further assistance, highlands001. Our team is readily available and delighted to help you with anything related to running payroll in QuickBooks Online.

    H
    highlands001Author
    January 31, 2024

    so the wage and the contribution will be deposited in 2 separate deposits? (I chose direct deposit instead of checks.)

    thank you

    L
    LeizylM
    January 31, 2024

    Hi there, highlands. I can share additional information about handling of medical insurance pay in QuickBooks Online (QBO) Payroll. 

     

    As mentioned by my colleague above, if a payroll item is set up as a company contribution,  it does not get included in the gross or net pay calculations. The company contribution always has an expense and liability that is generated. 

     

    You'll need to create a liability check to pay non-tax liabilities. I'll show you how:

     

    1. Go to + New and click Check.
    2. Choose the vendor from the Payee dropdown.
    3. Select hoose the account you use for liability payments from the Bank Account dropdown.
    4. Enter the Payment date and Check no..
    5. From the CATEGORY ▼ dropdown, select the account you use to track your liability payments then enter the amount. If you have sub-accounts for each agency you are paying, make sure to select those specific accounts and enter the appropriate amount for the agency. If you're not sure which account to select, check your payroll accounting preferences setup:
      1. Go to Settings ⚙, then Payroll settings.
      2. Select Edit ✎ in the Accounting section.
    6. Fill in the rest of the check as you normally would then select Save.

     

    On the other hand, if you wish to include this in your net pay, you will need to add it as additional compensation from your medical insurance provider. You can check this article for more information on company contributions:  Set Up And Manage Company Contributions

     

    We have a few reports that we can pull into your book. Please see this link to review the report lists and decide what you want to generate according to your needs: Run payroll reports in QuickBooks Online Payroll.

     

    Let me know if you have more concerns about managing employees' paychecks and other details. I'm here willing to help you anytime. Stay safe and have a good one.

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