Benefits Deductions & Additional Earnings

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Adding or Removing a Benefit Deduction

You can add or remove a recurring benefits deduction by finding the employee's name in the Team Roster tab.

1. Sign in to your Homebase account.
2. Click on Team on the left.
3. Click on an Employee's Name.
4. Navigate to the Job Details tab.
5. Scroll down to the Benefits section.
6. Click Add a Benefit to add a new benefit. 
7. Click on the pencil icon to edit an existing benefit. 
8. Click Save Change when finished.

Note: Benefit deductions are not paid out by Homebase. All deductions will remain in the company bank account, and you will be responsible for remitting them to the appropriate parties. 

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How are pre-tax benefits applied on payroll? 

Pre-tax benefit deductions are applied in the following order: 

1. Section 125 benefits (identified as 125 in the benefit type during setup)
2. Retirement benefits
3. Other benefit types

Supported benefit types:

Value	Description
125 Medical	A benefit belonging to a Section 125 Cafeteria plan that helps employees pay for qualified expenses related to medical care.
125 Vision	A benefit belonging to a Section 125 Cafeteria plan that helps employees pay for qualified expenses related to vision care.
125 Dental	A benefit belonging to a Section 125 Cafeteria plan that helps employees pay for qualified expenses related to dental care.
125 Disability	A benefit belonging to a Section 125 Cafeteria plan that helps employees cover premiums related to disability insurance.
125 Accident	A supplemental benefit belonging to a Section 125 Cafeteria plan that helps employees cover costs for emergency treatment covering injuries.
125 Cancer	A supplemental benefit belonging to a Section 125 Cafeteria plan that helps employees cover costs for financial and emotional support when dealing with cancer.
125 Critical Illness	A supplemental benefit belonging to a Section 125 Cafeteria plan that helps employees cover costs for life-changing illnesses and health events.
125 Hospital	A supplemental benefit belonging to a Section 125 Cafeteria plan that helps employees cover expenses not covered by major medical.
125 Life	A supplemental benefit belonging to a Section 125 Cafeteria plan that helps employees cover premiums related to life insurance.
401(k)	A 401(k) plan is a tax-qualified, defined-contribution pension account that provides for pre-tax retirement savings.
403(b)	A 403(b) plan is a retirement savings plan available to qualified non-profit groups. It has a tax treatment similar to a 401(k).
457	The 457 plan is a non-qualified, deferred-compensation retirement plan available to employees of government and certain non-profit organizations.
Roth 401(k)	A Roth 401(k) plan is similar to the 401(k) plan, except employees contribute post-tax funds and can withdraw tax free given certain criteria.
Roth 403(b)	A Roth 403(b) plan is similar to the 403(b) plan, except employees contribute post-tax funds and can withdraw tax free given certain criteria.
Roth 457	A Roth 457 plan is similar to the 457 plan, but allows employees to contribute post-tax funds and withdraw tax free given certain criteria.
FSA Medical	A medical flexible spending account (FSA) is a tax-advantaged account that allows employees to pay for eligible medical expenses.
FSA Dependent Care	A dependent care flexible spending account (FSA) is a tax-advantaged account that allows employees to pay for eligible dependent care expenses.
HSA	A health savings account (HSA) is a tax-advantaged medical savings account enrolled in a high-deductible health plan. Funds accumulate and can be used to pay for qualified medical expenses without tax liabilities.
SIMPLE IRA	A Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA) is a tax-deferred employer-provided retirement plan that allows employees to set aside money and invest it to grow for retirement.

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S-Corp Owner Health Benefits

S-corp benefits should not be added to an employee profile using the Benefits feature as described in this article. 

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, reach out to support via chat or via our Taxops@joinhomebase.com email and provide the total amount for the year and our team will add the benefit amount manually to the company's tax record for the year.

S-corp owner status should be indicated on the employee profile on the Job Details page under Payroll Settings.

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."

Example Order of Operations for Benefits Deductions

$1,000	Employee Gross Wage
- $200	125 Medical benefit deduction
= $800	New taxable wage
- $24	Simple IRA 3% = $800 * 3%
= $776	New taxable wage
- $50	FSA deduction
= $726	New taxable wage

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Adding Additional Earnings and Reimbursements

1. Sign in  to your Homebase account.
2. On the left side of your screen click on Team.
3. Click on the name of the team member a recurring earning needs to be added for.
4. In Job Details scroll down to Additional earnings and reimbursements.
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5. Click on Add recurring earning or reimbursements.
6.  Choose the type of earnings you are adding recurrently for the employee from the dropdown:
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7. Choose a Start date (required) and an End date (optional) for the recurring earnings to apply from the dropdown.
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   2. The Start Date and End Date refer to the actual pay date NOT the Pay Period.
   3. Note: No end date selected will ensure this recurring earning is applied indefinitely for the employee in question.
8. Choose the Frequency in which this recurring earning will be applied for this employee from the dropdown:
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9. Click Save. 
10. View and Edit your Additional Earning in Job Details for each employee they are set up for:
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11. You will be able to view all additional earnings when running payroll:
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Removing Earnings and Reimbursements

1. Sign in  to your Homebase account.
2. On the left side of your screen click on Team.
3. Click on the name of the team member a recurring earning needs to be added for.
4. In Job Details scroll down to Additional earnings and reimbursements.
5. Click Edit in the top right corner of the Additional Earning or Reimbursement you would like to delete.
6. Click the trash icon with the word Delete next to it.
7. Click Delete Recurring Reimbursement or Additional Earning in red.
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Note: For a more in-depth visual guide to adding a recurring additional earning or reimbursement, please see here