Group Term Life and other Imputed Income
Homebase supports the ability for you to enter in any Group Term Life (GTL), and Imputed earnings (such as gift cards or gift certificates) right into payroll!
How to calculate taxable Group Term Life
Figure out the total cost by multiplying the monthly cost by the number of months’ coverage at that cost.
Example: If Tom has insurance coverage at $80,000, Tom is 32 and he had coverage all year. Then you would take the cost ($0.08) multiplied by how much in excess ($30K) (since the cost is per 1K, you make it 30) multiplied by months of coverage. So it comes out to $28.80 total to report; 0.08(cost) x 30(excess) x 12(months)
How to enter GTL or Other Imputed Earnings
While in payroll step 1, go to Other Earnings and you should see those 2 earning fields available to use:
*Note* These must be included with other wages as these items are taxable and taxes will need to be calculated and withheld for them.
S-Corp (2% Shareholders Benefits or HSA Reporting)
Owners or greater than 2% shareholders of s-corporations or LLCs taxed as s-corporations are not eligible for pre-tax benefit deductions or contributions from the company on payroll. Instead, the cost of the health coverage for the owner is logged as a taxable fringe benefit and subject to special tax reporting on payroll.
S-corp owner benefits are logged as taxable income for federal and state income tax, but are not taxable for FICA (Social Security) or Medicare taxes. As a result, s-corp benefits should only be reported in Box 1 and Box 16 on the owner's W-2. Additionally, the benefit amount is reported in Box 14 annotating the total amount of s-corp owner benefit logged.
At this time, Homebase does not support s-corp owner benefits being recorded on payroll directly or as a benefit on an employee's profile. However, if an shareholder or owner needs to record a benefit amount for annual reporting, please notify Homebase's Payroll Support team in the total amount for the year and our team will add the benefit amount manually to the company's tax record for the year.
If this field is not completed, it does not block an employee from being included in payroll. However, to ensure accuracy of your payroll records, it's recommended to indicate the s-corp shareholder status for any owners as "yes."
Other Fringe Benefits or Special Earnings
If you have any other special earnings or benefit to report for the year, please reach out to the Payroll Support team with the following information:
- Employee Name
- Type of Earning or Benefit
- Tax Breakdown (if applicable)
If you do not have tax breakdown, we need confirmation that you’d like for us to calculate for you. We will not calculate withholding taxes on these adjustments but the wages will be taxable.
Still have questions? Feel free to reach out and we’d be glad to help!