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EEIAdmin
March 8, 2023
Question

Health Savings Account

  • March 8, 2023
  • 1 reply
  • 0 views

Is an employee Health Savings Deduction recorded as a liability? We have employees that deduct money from their paycheck on a bi-weekly basis, similar to health insurance pretax. Should this deduction show up on the Profit and Loss Statement? 

1 reply

R
RCV
March 11, 2023

Allow me to share information about processing payroll and health insurance in QuickBooks Online (QBO).

 

The employer contribution to the insurance will show up on the Profit and Loss report since this is a company expense. Then, the employee's deduction will then show up on your liability and not on your payroll expenses since this is not a company expense but is coming from the employee's pay. If you need to set up Health Savings Account (HSA) item for employee contribution, just follow the steps below:

 

  1. Go to Payroll, then Employees.
  2. Choose your employee.
  3. From Deductions & contributions, tap Start or Edit.
  4. Select + Add deduction/contribution.
  5. From the dropdown menu select Deduction/contribution type: HSA plans or Type: Pretax HSA or Taxable HSA.
  6. Enter a Description(appears on the paycheck).
  7. Select how your contribution is calculated. Then enter the amount or percentage.
  8. Add an Annual maximum amount.
  9. When finished, press Save then Done.

 

You can check out this article for more details about tracking HSA contributions in QuickBooks Online: Set up a Health Savings Account (HSA) item in QuickBooks Payroll. 

 

You can also skim through the topics from this link for additional guides while working with QuickBooks or payroll in the future.

 

Please keep me updated if you have any questions or concerns about processing. I'll be by your side every step of the way. Take care and have a wonderful day.

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EEIAdminAuthor
March 11, 2023

Thanks for the clarification! I thought I was on the right track but was unsure. The only thing is we do not use QuickBooks to process our payroll. We have another vendor that processes our payroll. I would need to change how the account is reporting in the "Chart of Accounts" currently, it is under an expense, which is incorrect because the company does not contribute to the employee's Health Savings Account; only the employee does. I am still having an issue because I see on our payroll reports that the money is deducted from the paycheck, but I do not see where it is disbursed on the payroll reports.

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user6910
May 16, 2023

Hey there - did you ever get a work-around for this? I also don't use QuickBooks Payroll (we use a different vendor and track in QBO). Did you set up an account to record HSA deductions made by employees? Did you use a Balance Sheet account? Thanks!

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