How to add non-taxable contributions like training funds (eg. $0.15 per hour) that should be paid by employer and send to union?

Hi blackandwhiteacc,

It's great to see you're using QuickBooks Online Payroll for paying your employees. Our payroll add-on has many options for deductions, contributions, and pay types. On occasion, you'll hit a snag. QuickBooks Online Payroll doesn't have a non-taxable contribution option. I can help you with a workaround to achieve the result you're looking for.

You can set up a reimbursement pay type; you can name Union training fund, for example. Then you'll need to create an after-tax deduction to remove the amount being added.

Let me go through the steps with you:

1. Go to Payroll from the left navigation menu.
2. Choose the Employee tab.
3. Select the employee you'd like to add the contribution to.
4. In the first column, click the Pencil Icon beside Pay. We're going to create a new pay type.
5. Scroll down to section 4, How much do you pay John Smith?, and click the Pencil Icon next to Additional Pay Types.
6. Under Common Pay Types, check the box beside Reimbursement. You can expand the tax information by click on the drop-down arrow.
7. If you have a specified amount you'll be paying, you can add it in the box; otherwise, leave it empty and click Save.
8. Next, you'll create the deduction. In section 6, Does John Smith have any deductions or contributions? click the +Add a new deduction.
9. In the drop-down menu, select New deduction/contribution.
10. For deduction/contribution type, choose Other deductions.
11. Under type, select Other after-tax deduction.
12. You can name it to match the reimbursement in the description box.
13. You'll need to add an amount or percentage per pay period.
14. Click OK.

When you run payroll, you can edit the amounts if you need to. If you'd like to see a non-taxable contribution as an option in future updates, I invite you to provide feedback in product. Go to the Gear Icon on the upper right-hand side. Select Feedback, and fill in the form—Click Submit feedback.

If you have any other questions, please reach out. I'm here to help.