Hello users,
I would love to move our wellness program into Ramp, but since it is a taxable benefit, I can’t figure out how to do that without running it through payroll. Does anyone else have a wellness program? If so, how do you include it as taxable compensation?
Hi, Lois - We don’t have a wellness benefit, but we do have various other benefits, including an education benefit. I would ask your CPA who knows the structure of your program how to add it to payroll as taxable compensation. I would love to see an integration that pushes certain benefits over to a payroll system.
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Thanks for the response. We currently run the reimbursement through our payroll system so that it is included as reportable compensation. If we are going to move it over to Ramp, I will need to ask Quickbooks payroll how to include it even if it isn’t paid through payroll. I doubt our CPA can help here since they don’t really know QBO payroll. Thanks for the advice.
Hi Lois, we created a dedicated spend program for it, set up a rule to automatically code the expenses to a dedicated general ledger account.
By using the spend program, you can filter reports to only show the expenses from that program for each employee. At the end of the year, we will export it, pivot table all the benefits per employee and add the sum to each employee’s December 30, 2024 check. That way it still gets reported correctly on their W2 and we don’t have to do it on every payroll individually which would be a ton of work.
Edit: your payroll provider should be able to set up a code for benefits that were already paid out before and are only recorded on the payroll without being paid out again.
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Hey, Robert! How do you solve the problem of having an unexpectedly large tax withholding from the employee’s December check? I like this idea, but from a practical standpoint if we were to do this I know a lot of our employees would be shocked by the lower paycheck at year-end due to the extra tax withholdings (even if we warn them).
Our benefit is $25 per month, total of $300 for the whole year, so the tax hit for most people in December is max $100 and we did inform them about this.
Of course there is always the option to gross-up the amounts in Payroll if your employer is willing to absorb the taxes. If not, you could even reduce the nominal amount of your benefit so that the gross up doesn’t cost your company any additional money and explain to your employees, that they are still getting the same amount of money as before, it just means that instead of getting $1000 benefit and then having to pay $300 taxes on it, the benefit is now $700 and the company will pay the $300 taxes for them.
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