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Payroll question > How to setup a deduction/benefit pre-tax (Ex: health insurance)?

  • 25 July 2022
  • 3 replies
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Which setting configuration is needed to setup a deduction/benefit pre-tax? I can’t find this in the documentation. Thanks!

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Best answer by mikedavidson07 25 July 2022, 15:38

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Hi Haylee,

When setting up your deduction or benefit check the box on the right “Affect tax calculation”.  Then in the bottom section you can choose the tax configuration to meet your needs.

 

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Hi @mikedavidson07! In the example of the deduction/benefit for health insurance where it would be pre-tax, would the subject to taxes be none then? 

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Haylee,

If its Health Insurance type deduction or benefit use the Per Tax Engine and Benefit Type (see explanation below).  If it’s something else that you wish to exclude form taxs, your are correct, you could choose None.

If its a health insurance you want to let the tax engine handle it as it works in conjunction with what you choose for the Benefit type.  In my example for DENTAL, Subject to Taxes = “Per Tax Engine” and the Benefit Type would “SECTION125”.  This last setting “Benefit Type” is important as it sets the proper tax exemptions for you as well as determines how it will be reported on the W2 at year end.

 

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