Square Payroll: How do I add a health insurance benefit?

[EyesAllOver]

When providing health insurance for employees. How can you set payroll to pay the premiums from the business end and deduct from employee payroll?

[Tom]

Thanks for surfacing this, @EyesAllOver. I'm going to run your post by our Payroll Team for further clarification—back with an update as soon as possible.

[EyesAllOver]

@Tom I've not heard anything regarding this....any news? I need to deduct healthcare premiums.

[Tom · Accepted solution]

Hey @EyesAllOver, apologies for the delay! Yes, I was able to touch base with our Payroll Team and get some more information. Square Payroll will not pay out to the insurance provider, though it will calculate and report the appropriate amounts—you will need to make the payment to the health insurance provider.

To set up this benefit for your employees:

1. Log in to the Payroll section of the online Square Dashboard.
2. Click Employees > select an employee who will have the benefit.
3. Click Add Benefit. If you’re creating a benefit for the first time, click Create New.
4. Enter a plan name as you’d like it to appear in your employee’s pay stubs. For example, "Health Insurance" or "401(k)". Note: The benefit name can’t be edited retroactively.

5. Click Select > choose which type of benefit you’d like to enable for this employee.

   Note: It’s very important that the benefit type is correct, since this determines how your employee’s deductions and employer contributions are taxed and reported on tax forms like Form W-2.

6. Specify the details for your employee’s deductions. This information has been provided to you by your benefit provider, so you should reach out to them with any questions.
   • Calculation Method: Enter the amount or percentage to be deducted per pay period or per month.
     • If you choose to deduct a percent of the employee’s paycheck, the amount will be calculated from the employee’s gross pay before taxes.
     • If you choose to deduct a fixed amount per month, we will determine the amount to be deducted each paycheck based on your payroll schedule. If you pay your employees weekly, we will divide the amount by four. If you pay your employees every other week, we will divide the amount by two. In months with extra paychecks (months that have five pay dates for a weekly payroll schedule or 3 pay dates for a semi weekly payroll schedule), we will not make any deductions in the last paycheck of the month.
   • Deduction to date: If you’re switching payroll providers, it’s important that you provide the correct deducted-to-date amount for each employee.
   • Deduction limit: Enter the annual limit for the total amount that can be deducted for this employee.
7. Specify the details for your company’s contributions towards this benefit.
   • Calculation Method: Enter the amount or percentage to be deducted per pay period or per month.
   • Contributions to Date: Total amount the employer has contributed to this employee’s benefit to date.
   • Contribution Limit: The annual limit for the total amount the employer can contribute for this employee.
8. Click Save.

Once you’ve created a benefit for one employee, you’ll be able to apply this benefit to the rest of your employees.

Hope this helps clear things up. Learn more about setting up and using benefits in our Support Center: Add Existing Employee Benefits.

[Tom]

One more resource that may help streamline this process!
 

We integrated with SimplyInsured to make it easier to offer medical, dental, and vision insurance. You can enroll directly from the Square Payroll Dashboard and pick a health plan that best fits you and your business. This service integrates seamlessly with Square Payroll, and all contributions and deductions sync automatically with each pay run.

Learn more here: Payroll Health Insurance Benefits.

Please don't hesitate to let us know if any other questions come up. 🙂

[SilverLinings1]

I am considering beginning Square payroll 2021.  Is there an option to deduct health insurance benefits pre-tax?  Also, is this easy or difficult?  And is there an extra fee associated with health insurance deductions? 

[JustinC]

This thread might help! Check out Tom's posts above @SilverLinings1

[SamBoswellPCR]

Your reply "This thread might help! Check out Tom's posts above @SilverLinings1" sends us to a page with a link back to this page. Am I to understand that there is no pre-tax option when deducting an employee's health insurance premium payment during payroll processing in SquareUp? ADP has such an option.

[JustinC]

@SamBoswellPCR 

Apologies - I reply to so many posts a day and probably got turned around back in October when I last replied. Tom's response up top is the one to look at. I just marked it as a best answer so you can easily spot it. 

If that's not the answer you're looking for and you still need further explanation, reach out to our Payroll Team. These types of things are highly regulated with specific language, so I want to make sure you talk to experts that give you the right info. 

[Darenh92]

Square Payroll offers a service to manage your payroll and employee benefits, but the specific features and steps may have changed since then. To add a Florida health insurance marketplace benefit for your employees using Square Payroll, follow these general steps. Keep in mind that the exact steps may vary based on any updates or changes made by Square Payroll, so it's advisable to consult the most recent documentation or contact Square Payroll's customer support for the most up-to-date guidance:

1. Access Your Square Payroll Account:

   • Log in to your Square Payroll account using your username and password.

2. Select the Appropriate Option:

   • Look for a menu or section related to employee benefits. This might be labeled "Benefits," "Employee Benefits," or something similar.

3. Add a Health Insurance Benefit:

   • Within the benefits section, you should find an option to add a new benefit. This may involve clicking on a "Add Benefit" or similar button.

4. Enter Benefit Details:

   • Fill out the required information for the health insurance benefit. This typically includes details such as the name of the health insurance plan, coverage start date, premium amount, and employee contribution (if any). You may also need to specify eligibility criteria for employees.

5. Review and Confirm:

   • Review the information you entered to ensure accuracy. Double-check premium amounts and any other relevant details.

6. Save or Confirm:

   • Once you are satisfied with the information you've provided, save or confirm the addition of the health insurance benefit. This step may involve clicking a "Save" or "Confirm" button.

7. Communicate with Employees:

   • After adding the health insurance benefit, make sure to communicate the details to your employees. They may need to enroll or make selections related to their coverage.

8. Set Up Deductions:

   • Depending on your payroll settings, Square Payroll may automatically handle the deductions from employees' paychecks to cover their share of health insurance premiums. Ensure that these deductions are correctly configured.

9. Monitor and Manage:

   • Regularly review your payroll and benefits administration within Square Payroll to ensure that health insurance benefits are being processed correctly and that any changes or updates are made as needed.

10. Compliance and Reporting:

    • Stay informed about any legal requirements or reporting obligations related to employee health insurance benefits. Square Payroll may assist with compliance and reporting, but it's essential to understand your responsibilities as well.

Please note that software platforms like Square Payroll frequently update their features and user interfaces, so the exact steps and terminology may have changed since my last update. For the most accurate and up-to-date guidance on adding health insurance benefits through Square Payroll, consult their official documentation or contact their customer support.