Benefits Costs Pushed to Payroll for S Corp Owners
Companies who sync their payroll can choose to have Zenefits manage the costs of their S Corp owners' benefits in payroll. If so, Zenefits will push the amounts paid by or on behalf of S Corp owners for the following types of benefits to payroll as taxable income using the specific S Corp Income item defined by each payroll provider.
|Benefits Type||Income in Payroll||Taxability*||Field on W-2|
|Medical, Dental, Vision insurance||S Corp Income||Federal + State Income Tax||Box 1, 16, 18*|
|HSA||S Corp Income||Federal + State Income Tax||Box 1, 16, 18*|
|STD + LTD (Disability) Insurance||S Corp Income||Federal + State Income Tax||Box 1, 16, 18*|
|*Local income tax rules may vary for S Corp income.|
Owners will see the S Corp income item on their pay stubs. They will be taxed on this amount (as part of their gross income) but will not receive it in their paycheck. Learn more.
Talk to an accountant for guidance on handling the cost of Basic (Group Term) or Voluntary Life Insurance or Commuter Benefits for S Corp owners in payroll as taxable fringe benefits.
S Corp owners should not enroll in an HRA or FSA (Medical or Dependent Care) through Zenefits without first consulting an accountant.
Thank you for the feedback!