Expert: Shirley McAllister, CPP, PHR - 7/25/2008

Question
My employees recently started receiving medical and dental benefits, and have to pay for their spouses coverage. I use Paycycle for Quickbooks to manage our payroll. I set it up so that there is a Taxable Insurance Premiums deduction for Dental Insurance and Medical Insurance.

A certain amount is withheld from each paycheck for this purpose. I am not sure how I keep a record of this money that is withheld and associate it with the money I am paying our insurance company. Can you please advise me on this?

Thank you!

Answer
I am not that familiar with Quick Books as I use Oracle.  I have in my system the insurance withheld set up  and coded as an insurance payable when it comes from the employee's payroll check.  Than when I pay to the insurance company it is cleared.

I simply print out the code I have set up and reconcile it with the billing when the billing comes in.

Thus when payroll is paid the insurance withheld is coded to payable for insurance. Whatever is in that GL code for the month is reconciled with the billing. Remember to post the billing portion back to the GL code when paying to clear the amount in the payable account to zero.

I am not very good at explaining this, I hope you can understand what I am saying.

A simple example might be:

Gross wages(803000) debit 2000.00
                         Taxes (210000)  credit   400.00
                         Insurance (211200) credit 100.00
                         Net wages credit(211800) 1500.00
--------------------------------------------------------
Debits= 2000.00           Credits = 2000.00

You could run your 211200 GL code and match it with your dependent portion of your insurance billing. If it is not broken out you find a single employee and you subtract the single amount of the billing and you will get the dependant portion of the billing for each employee. Once you have it figured you can keep a copy of it and it should be the same each month. If it changes you need to find out why. It should only change when a new employee is added or when new dependants are added or removed.

Shirley