Workers Compensation or Workers Comp is a type of insurance. It is basically designed to confirm that you are providing the actual amount or wage to every worker of your company. If you are running a business then, surely you have your employees or workers who are working in your company. You also might know about how to set up workers comp in QuickBooks. If not then this article is for you. You will know the whole thing of Workers Comp, Set Up Workers Comp in QuickBooks. And, also you get to know about how I set up workers’ compensation in QuickBooks Online.
Firstly, briefly understand the term of Workers Compensation
Defining Of Workers Compensation:
In the above paragraph, you read that workers’ compensation is insurance. It is synchronized by every state. And, most of the states want the employers to undertake the annual worker’ comp audit to ensure that they are providing the right amount of wages and premiums to their workers and also the medical benefits. Although, you have an advantage if you are an employer. Your workers or employees can surrender their rights to fire you for any wrong behavior or torture. That’s why, employees have rights with limited coverage, and give up some rights for the alternative. And, this is the reason why the compensation system is also known as a compensation bargain.
Now, let’s know how to set up and edit workers comp in QuickBooks Online
How To Set Up And Edit Workers Camp In QuickBooks Online?
Follow the below instruction for the workers’ comp process in QuickBooks. These steps will definitely help to set up. But before the steps, you should know about the requirements that you need to set up.
Each state has its own individual Workers Compensation Board or Commission (WCB). But also, the Northwest countries and Nunavut have a Unite Workers Compensation Board.
For particular needs for every region, refer to your country’s government. Otherwise, contact the Association of Workers’ Compensation Boards of Canada (AWCBC). It is a national resource of data about Workers Compensation.
Then, Make A Workers’ Compensation Payroll Item
- From the Payroll Item List, select on List.
- Then, from the drop-down list of Payroll Item, click on New.
- Select the Other Tax from the Payroll Item Type display and then Next.
- The screen of Name used in paycheques and payroll reports, fill out the name of the item, and then Next.
- Then, on the screen of the Agency for company-paid liability. In this, the field of entering the name of the agency to which liability is paid selects the suitable supplier.
If you didn’t see the option there then create one by clicking on Add New from the dropdown list.
- Then, select the account that you have created to keep the record of workers’ compensation or just leave it as the default account. And, then Next.
- Skip the selection as None from the Tax Tracking Type screen. And then, Next.
- In the Default rate and limit display, mention the rate specified by your country’s government.
Also, ensure that you use the % sign after the rate such as 3.90. Otherwise, it will count as $3.90.
- Then in the Taxable Compensation screen, ensure that you did a checkmark to all the payroll items that you require workers compensation calculated then Finished.
Add The New Workers Compensation Payroll Item In The List Of Existing Employees
- Click on the Employees and then, the Employee Centre.
- Do the double-click on the Employees.
- Then, in the Payroll Info button, select the Taxes and TD1.
- In the Taxes screen, click on the first row of the column item name, and click on the workers’ compensation which you have created from the drop-down list.
- Click on OK and then OK again for shutting the employee’s screen.
Do this process of every existing employee in your company.
Set The Workers’ Compensation As The Default Payroll Item
- Select the Edit option then Preferences.
- In the Payroll & Employees then, select the Company Preference option.
- Go for the Taxes option in the Employees Default.
- Then, in the taxes screen, click on the first row of the column item name. And click on the worker’s compensation item which you have created from the drop-down list.
- Click on OK then OK again to close the Screen.
And, now if new employees are added to their profile they will automatically have the workers compensation.
Pay The Workers’ Compensation Payroll Liability
When you have paid all the employees. Then, you can easily pay the workers’ compensation by just using the same process which you already use to pay other payroll liabilities.
You can easily set up and edit the Workers’ compensation in QuickBooks software by following the above instructions.