How to include a non-cash taxable benefit using Quickbooks Online payroll?

With Quickbooks Online payroll, how can you add a non-cash taxable benefit (ex: a housing benefit) to an employee's pay?  This amount would need to be included in the gross pay calculation, and be used to calculate tax deductions, but it would not flow down to the net pay as it is non-cash benefit.  I can't find a way to add this.  Thanks


Answer

You need to set up two new payroll items.  The first one is an Addition.  We pay for parking spaces for our employees which is considered a taxable benefit.  Our Addition item is called Parking.  The amount is xxx.  In Tax Tracking we chose Box 40/L Other Taxable Benefits. The expense account is a sub account of Payroll Expenses called, "Parking Benefits".  It is not insurable, but it is subject to Income Tax and both CPP amounts.  Under, "Calculate Based on Quantity" we chose "neither"  Gross Vs. Net, we chose "Net Pay", Default Rate, Limit Type, "Annual - Restart Each year"

Now, there is a Deduction.  Our Deduction item is called Parking Benefit.  The amount is xxx.  In Tax Tracking we chose :No Tax Tracking", No taxes are involved.

It works like a charm.  You now have to add the two items to each employee.  It will go on their paycheque and off of their paycheque with each pay, and only calculate extra Income tax and CPP contributions.

Let me know if you need any more help!

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