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O
OMPUMC
April 7, 2024
Question

QBO Payroll Setup. I see how to add deductions, but I cannot see where to add a non-taxable addition. Where can I do that?

  • April 7, 2024
  • 2 replies
  • 0 views
This is for a housing exclusion, which is a portion of a pastor's salary that is non-taxable.  In desktop we were able to use salary "addition" (versus deduction).

2 replies

A
ArielI
April 7, 2024

 

Welcome to the Community. I'm here to help you add non-taxable additions to QuickBooks Online Payroll.

 

To add a non-taxable addition, you need to create a payroll item and then add the amount to the paycheck. Here's how:

 

  1. In the left menu, click Payroll.
  2. Go to the Employees tab.
  3. On the Employees page, select the worker you're working on to open its profile.
  4. Click the Pencil icon for Pay under Employee details.
  5. Click the Add additional pay types link under the How much do you pay this employee section.
  6. Locate and select the Nontaxable Per Diem Recurring amount.
  7. Click on Save, then Done.

 

You can refer to this article for more information about supported pay types in QBO: Add or change pay types in QuickBooks Online Payroll.

 

Furthermore, you can visit this article to give a comprehensive list of reports and an overview of what data they display: Run payroll reports.

 

If you have further questions about adding nontaxable addition, you can comment below, and we'll respond to you as soon as possible.

O
OMPUMCAuthor
April 9, 2024

Per Diem may work, but I cannot change the title to HOUSING EXCL.  Will it show up on the W-2 in box 14?

A
AdonL
April 9, 2024

Allow me to chime in and share information on renaming employee pay types, OMPUMC.

 

In QuickBooks Online (QBO), renaming some pay types is possible, but changing Per Diem is unavailable. It won't also appear on W2 box 14. Somehow, other pay types, including clergy housing, reimbursements, Employer HSA contributions, and HWB are non-taxable. I recommend consulting with an accountant to determine the best pay type for your situation.

 

I've also added these articles on how to set up additional pay items and what reported pay types are in W2 Box 14:

 

 

When you're ready to pay your employees, check out these articles on how to update pay schedules and run your payroll :

 

 

Let me know in the comments if you have further questions about managing pay types in your QuickBooks Online Payroll account. Have a good one.

O
OMPUMCAuthor
April 13, 2024

I have worked with QBO Payroll representatives.  They could come up with no way for QBO Payroll to tax part of my employee's payroll and make the other half a non-taxable addition.  It either taxes the whole salary "Clergy House (cash)" or reduces the net pay via "Clergy Housing (in kind)".  QBO has no workable solution to allow taxing half of salary and "adding" the housing half of gross salary tax free to the net pay (like we can do in QB Desktop with housing showing up in box 14 on W-2). QBO recommendation was to force employee to exempt fed & state tax and ask them to pay quarterly estimates.  It appears we will have to abandon QB Payroll.

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