Payroll Webinar: What You Need to Know about Benefits Taxation
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You will learn the payroll department’s responsibilities pertaining to the set-up of employee benefits, including retirement, health and welfare and other benefits. You will learn what payroll department staff need to know when tax withholding needs to occur and how to communicate the tax withholding effectively to employees. Learn how to be proactive on employee taxation issues with management and prevent surprises.
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Payroll Webinar: What You Need to Know about Benefits Taxation
- 1. Organize. Humanize. Maximize. What You Need to Know about Benefits Taxation September 22nd, 2020 Frank Gottschall
- 2. Organize. Humanize. Maximize. 2 Recruiting & Onboarding Talent Management HR & Benefits Payroll Time & Attendance Ascentis Ascentis provides: • A-la-carte HR technology • Industry-leading time & attendance • Easy dashboards for actionable insights • Unsurpassed support 30+ Years of experience growing with you as an HR professional throughout unprecedented change in the role of HR and expectations of employees. The Ascentis Product Suite
- 3. Ascentis CarePoint Organize. Humanize. Maximize. 3 Core Functionality: • Checks the employee’s temperature without the need for touching a device or another human interaction • Check temperature without removing mask, hats, and/or other protective apparel that could compromise employee safety • Touch-free workflow that allows employees to fully interact with all essential clock functions with voice • Connects seamlessly into the already existing USB port on all NT8000 clocks
- 5. Organize. Humanize. Maximize. 5 Housekeeping - How to earn credit Stay on the webinar, online for the full 60 minutes Be watching using your unique URL sent to you from GoToWebcast Program codes delivered by email, to registered email, approximately 30 days following today’s session
- 7. Organize. Humanize. Maximize. 7 Today’s Speaker Frank Gottschall, CPA, CPP is an experienced payroll, benefits and accounting executive who was in a leadership position in the payroll field for over 20 years and currently serves as the President of the Gottschall Consulting Group. His career began in public accounting with Deloitte & Touche and he eventually moved to Macy’s, Inc. where he served as the Vice President of Payroll for over 13 years. In March 2009, he transitioned to FirstGroup America, Inc., where he served as the Vice President of Benefits/HRIS/Payroll until he started the Gottschall Consulting Group in September 2016. The Gottschall Consulting Group performs payroll, benefits and accounting consulting services focused on process efficiency and cost saving opportunities. Frank graduated cum laude with a Bachelor of Business Administration degree majoring in Accounting from the University of Cincinnati. Frank Gottschall
- 9. 9 Disclaimer The Gottschall Consulting Group does not practice law or give legal advice. The following material is intended for general information only and you should consult with your legal counsel prior to making any decisions.
- 10. 10 Agenda 401(k) Plans Nonqualified Deferred Compensation Plans (NDCP) Section 125 Plan Health Savings Account COBRA/Company Paid COBRA Long-term Care Company Paid Life Insurance Moving Expenses Gross-up Personal Use of Company Cars Stock Options Awards Voluntary Benefits
- 11. 11 401(k) Plan - NDCP Comparison 401(k) 401(k) Roth NDCP 1 Federal pre-tax deferrals of compensation Yes No Yes 2 Federal tax deferred earnings growth No Yes No 3 Employee contributions subject to FICA/FUTA Yes Yes Yes * 4 Federal tax upon distribution Yes No Yes 5 Employee contributions impacted by NDCP (review Plan definition of compensation) Maybe Maybe N/A 6 Determine eligible compensation Yes Yes Yes 7 Review plan document Yes Yes Yes * Special FICA timing rule
- 12. 12 Section 125 Plan Medical, Dental, Vision, etc. Documented plan will result in pre-tax benefit for federal and FICA tax Win-Win for employer and employee If multiple plans are offered, which plan is the right plan for an employee? Higher premiums, lower deductible, lower out-of-pocket maximum? Lower premiums, higher deductible, higher out-of-pocket maximum? Tax impact to employee needs to be considered
- 13. 13 Health Savings Account Double tax benefit + tax free growth Must be enrolled in the employer’s high deductible medical plan If offered under an employer’s section 125 plan, employee contributions are deemed employer contributions and reduce income Employer match contributions excluded from income
- 14. 14 COBRA/Company Paid COBRA COBRA Employee paid – after-tax Employer paid – not taxable
- 15. 15 Long-term Care Treated as accident and health insurance contract Amounts received are excluded from income, however, caps exist Employer provided coverage is excluded from income similar to section 125 plan
- 16. 16 Company Paid Life Insurance Group-term Life Insurance – most popular Value of coverage in excess of $50,000 minus employee premium is taxable income FICA withholding required, Federal withholding optional Exceptions Plan must be non-discriminatory
- 17. 17 Moving Expenses IRC Sections 82, 132 Effective for amounts paid in calendar years 2018-2025 Not deductible by company or excludable from employee gross income Exception for military personnel Changes to company policy? Gross-up (entirely, partially or none) and how calculated? Offer flat dollar amount and delegate move to employee? Frequency of manual checks vs regular payroll timeframe? Communication to impacted employees?
- 18. 18 Gross-up Ideal concept to “make employee whole” for a taxable benefit What does “make employee whole” mean? What does an employee think “make them whole” means? How much does it take to make an employee whole? How does an employee react when a benefit is taxed? Impact of Section 125 plans on gross-up calculation
- 19. 19 Personal Use of Company Cars Excluded from income De minimis fringe benefit Qualified nonpersonal use vehicle Working condition fringe benefit Personal usage FICA withholding required; Federal withholding optional Valuation methods Fiscal year election available When do you record income and withhold tax? How often does employee reporting occur?
- 20. 20 Stock Options Qualified Incentive Stock Option Plan Employee complies with holding period – preferential tax treatment Non-qualified Incentive Stock Option Plan Broker provides taxing information based on employee elections on shares exercised – Federal and FICA Employee elects to sell shares to cover taxes Employee elects to pay taxes
- 21. 21 Awards Length of service or safety achievement awards IRC sections 74, 274 Effective for amounts paid or incurred after 12/31/2017 Clarification of definition of tangible personal property, not a change Items not tangible personal property Cash payments and gift cards Vacations, meals and lodging Theater or sporting event tickets
- 22. 22 Voluntary Benefits Non-taxable Fringe Benefits Working condition fringe Qualified employee discounts De minimis fringes Qualified transportation On-premises athletic facilities Gift Cards Always taxable Car Insurance Pet Insurance
- 23. 23 Q&A Frank Gottschall – 513.908.5882 or fgottschall@GottschallConsultingGroup.com www.GottschallConsultingGroup.com
- 25. Organize. Humanize. Maximize. 25 How Ascentis Payroll Can Help Ascentis aims to be our clients HCM partner and provide relevant information organizations need to be thinking about in order to ensure their own processes remain current and give our users the power to be the leaders in their organizations. With Ascentis Payroll You Can: • Systematically manage the different sick pay classifications discussed on behalf our customers • Perform the filing and deposits of the tax with each pay period • Correctly classify and report all values for both the 941 quarterly & annual deadlines • Correctly classify, report, and distribute data on form W2 Recruiting & Onboarding Talent Management HR & Benefits Payroll Time & Attendance Ascentis
- 26. Organize. Humanize. Maximize. 26 Contact Us info@ascentis.com www.ascentis.com 800.229.2713
Editor's Notes
- Updates from v1 to v2: Succession Planning slides expanded from two to three slides total, with new graphics replacing old, washed-out ones…
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- For those that are new to our webinars, here are three quick housekeeping notes: 1) Please enter all your questions into the chat box. Questions about sound quality or even accreditation will be answered right away. And questions for our speaker will be addressed during a brief Q&A at the end of the presentation. 2) Today’s slides are available for download from the Event Resources tab in your webcast player and will also be distributed to all of our audience members via email tomorrow. 3) This webinar is certified for credit. The criteria for credit is outlined on this slide for you to see. Please note: You must be logged in using your unique link from the confirmation email and you must attend for the full 60 minutes to get credit.
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