How do I add benefits to my FreshBooks Payroll?

For FreshBooks Payroll powered by Gusto users, FreshBooks Payroll can record benefit contributions as part of regular payroll runs. Benefits are non-wage forms of compensation provided to employees, like health insurance and retirement plans.

You can set up deduction and contribution amounts, and assign which employees are eligible. Once benefits are set up, payroll runs will automatically calculate and record benefit contribution amounts for employees. Note that benefits are not included in bank debits for wages and taxes, and benefit amounts are recorded in applicable year-end tax filings.

 

• Add New Benefit
• Manage Benefits
• FAQs

 

Add New Benefit

Create a new benefit with the below steps:

1. Select the Payroll section
2. Next, select More Actions, and then select Payroll Settings
   
3. Select Benefits
   
4. In the Benefits section, select the Add benefit button
   
5. Under Benefit Details, enter the Name of the benefit, this will be displayed on employee pay stubs and in payroll records
   
6. Next, select the Type, and choose from any of the following:

   Health Medical Insurance Dental Insurance Vision Insurance Health Savings Account Health FSA Dependent Care FSA Group-Term Life Insurance Short Term Disability (post-tax) Short Term Disability (post-tax imputed) Long Term Disability (post-tax) Long Term Disability (post-tax imputed) Short Term Disability (pre-tax) Long Term Disability (pre-tax) Voluntary Short Term Disability (post-tax) Voluntary Long Term Disability (post-tax) Voluntary Life (post-tax)

   Savings and Retirement SIMPLE IRA SIMPLE IRA (Non-elective) Roth 401(k) Roth 403(b) 401(k) 403(b) SEP-IRA SARSEP Transportation Commuter Benefits (pre-tax) Personal Use of Company Car Commuter Parking Commuter Transit Other 529 College Savings Other (taxable) Cell Phone (taxable) Gym & Fitness (taxable) Housing (taxable) Wellness (taxable)

7. Select Save & continue
8. Next, select the checkboxes next to each employee you’d like to add to the new benefit you’ve created
   
9. Depending on the benefit, specify the deduction and/or contributions in any of the applicable fields:
   1. For Employee deduction per pay period, choose either Percentage of gross pay, or Amount ($) and enter the amount
   2. For Annual deduction limit, choose either Use standard limit, or Use special ‘catch-up’ limit
   3. For Company Contribution per pay period, choose either Percentage of gross pay, or Amount ($) and enter the amount
   4. For Annual maximum contributions, specify the maximum amount
   5. For Employee deduction per pay period, enter a fixed amount
   6. For Company contribution per pay period, enter an amount
10. Then select Submit
11. Review the list of employees for the new benefit, and if needed, under the Actions column, select the three dots next to any employee, and select either:
    
    1. Select Edit employee benefit
       1. Next, edit the amount(s) in the Employee deduction per pay period and/or Company contribution per pay period fields
       2. For Currently active?, select either Yes, continue to make deductions and contributions or No, stop making deductions and contributions for now
       3. Then select Submit to save your changes for this employee
    2. Or select Remove from benefit
       1. Select Confirm to finish and the employee will be removed from this benefit
12. Then select the Back button
13. If you have additional benefits to add, repeat steps 4-12 until all new benefits are added
14. Next, select Finish. Your new benefits will appear in payroll calculations when payroll is run, and in the payroll history with a breakdown of all the amounts. When applicable, benefit contributions will be recorded in the appropriate boxes on yearly W-2 forms.

Notes:

• For advice on the specific taxability of a benefit or details of a particular plan, consult a tax advisor or your benefit provider directly
• Bank Reconciliation - If you use bank rec, mark payments to payroll benefit providers as transfers since benefit amounts are already included in your payroll expenses
• Benefit Deduction Types
  • Pre-Tax Deductions - Funds are taken out before employee and employer taxes are calculated, this reduces taxable income
  • Post-Tax Deductions - Funds are taken out after employee and employer taxes are calculated, this does not reduce taxable income
• Retroactive Benefits - If you need the new benefits to apply retroactively to previous payroll runs, contact our Support team directly
• S-Corporations - If your business is set up as an S-Corporation (S-Corp), the tax status is also relevant for calculating taxes for benefits
  • Before setting up benefits, ensure all your employees’ 2% shareholder status are accurate - if needed, review each employee’s payroll profile information
  • Review the IRS’ S-Corporation employees, shareholders, and corporate officers for details

Manage Benefits

You can update existing benefits, as well as add new employees to or remove employees from your existing benefits through your benefits settings. Use the below steps to manage an employee’s benefit:

1. Select the Payroll section
2. Next, select More Actions, and then select Payroll Settings
   
3. Select Benefits
   
4. In the Benefits section, under the Actions column, select the three dots next to a specific benefit and select either:
   
   1. Select Edit benefit to update the benefit name, then select Save & continue
   2. Or select Edit employees
      1. In the list of employees, select either:
         1. Select the Add employees to benefit button
            
            1. Next, select the checkboxes next to each employee you’d like to add to the benefit
               
            2. Depending on the benefit, specify the deduction and/or contributions in any of the applicable fields:
               1. For Employee deduction per pay period, choose either Percentage of gross pay, or Amount ($) and enter the amount
               2. For Annual deduction limit, choose either Use standard limit, or Use special ‘catch-up’ limit
               3. For Company Contribution per pay period, choose either Percentage of gross pay, or Amount ($) and enter the amount
               4. For Annual maximum contributions, specify the maximum amount
               5. For Employee deduction per pay period, enter a fixed amount
               6. For Company contribution per pay period, enter an amount
            3. Then select Submit
         2. Under the Actions column, select the three dots next to any employee, and select either:
            
            1. Select Edit employee benefit
               
               
               1. Next, edit the amount(s) in the Employee deduction per pay period and/or Company contribution per pay period fields
               2. For Currently active?, select either Yes, continue to make deductions and contributions or No, stop making deductions and contributions for now
               3. Then select Submit to save your changes for this employee
            2. Or select Remove from benefit
               1. Select Confirm to finish and the employee will be removed from this benefit
         3. Select the Back button when you’re done editing employees
5. Then select the Finish button to exit your benefits settings.

 

Note: To record previous contributions for discontinued benefits, use the steps in Manage Benefits to update a benefit’s status for a specific employee to No, stop making deductions and contributions for now. This will not remove the employee from the benefit and allow you to record previous contributions.

 

FAQs

Does FreshBooks Payroll also pay out the funds for benefits?

Employer and employee contributions must be paid directly to your benefit provider(s) outside of FreshBooks. The funds will not be debited from your bank account when wages and employer taxes are processed. The amounts for each benefit can be found on employee paystubs and in the Payroll Journal report.

 

How do I update my payroll information to reflect the benefit contributions my business and employees have been making this year outside of FreshBooks Payroll?

Corrections to past payroll runs based on contribution details can be done by our Support team. Create benefits, including benefits that are no longer active, using the Add New Benefit steps first, then reach out to our Support team directly.