Employee Benefits & Deductions Made Simple

At Fireside Tax, we want you to know that payroll isn’t just about wages — we can also set up a wide variety of employee benefit deductions and contributions. Many of our clients are surprised to learn how many options they can offer their teams with just a few adjustments in our payroll system.

While our payroll software can easily track and deduct these amounts from each paycheck, some benefits require the business owner to handle the actual payment to the provider. In those cases, you can simply set aside the total amount per pay period or month and have your provider auto-deduct or bill you directly.

We highly recommend our local partner Sirak Financial for finding benefit plans that work for your business, but you’re welcome to work with any provider you choose. Be sure to mention that Fireside Tax referred you to Sirak Financial if you chose them.

Benefit Tracker

At this link: Click Here, you’ll find a simple benefit tracker we designed with small teams in mind. We recommend opening it in Google Sheets, since that’s where it was created.

The tool is intended to help small businesses like yours estimate benefit costs and understand the monthly breakdown for both employer and employee, regardless of pay schedule. Our payroll team can convert these totals into per-pay-period amounts. To keep things simple, we suggest rounding to the next whole number—for example, if the employee’s share is $575.75 per month and you need to split it into weekly payments, round up to $575.76 avoid issues with fractional cents in the payroll software.

When you click the link, it will open to a mostly blank screen showing the file name. To access the tracker, download it (top right download symbol), then extract the zip file. (right click the .zip file and click extract) In Google Sheets, go to File → Open or File → Import and select the extracted file.

Now edit as you please and you’ll see an example line of how the befits are specified by employee and it let’s you know what to set aside per month and have ready financially before you commit to adding these employee benefits.

Regular communication with the accounting and payroll team at Fireside Tax will help you, as the owner, stay on top of your benefits rather than feeling overwhelmed. There’s no need to hesitate in asking for support—between Fireside Tax and Sirak Financial, we are here to help turn your business dreams into achievable goals.

What to Expect When Offering Health Insurance for the First Time

• Think of health insurance as a shared cost between you and your employees.
• You decide how much of the monthly premium you want to cover and how much the employee will pay.
• Your share comes out of your business checking account  (preferably your obligation checking account) each month.
• The employee’s share can be automatically deducted from their paycheck so they don’t have to remember to pay separately and of course you move those funds to your obligation checking account to be withdrawn. 

Remember to have a business checking for operations and a business checking for obligations, it makes managing costs so much easier. 

If You and Your Employees Choose a Plan with a Health Savings Account (HSA)

Employees may want to put extra money into their HSA each pay period to help cover future medical expenses. Let each employee decide how much they want to commit to contribute, and we can set that amount up in payroll. As an employee it is difficult to know what is the right amount so it is best to start small and review their budget. Then the employee should consider how often they go to the doctor or see specialists and if they have dependents that also need care. 

To maximize tax savings, it’s best to deduct HSA contributions pre-tax through payroll. This reduces the employee’s taxable income, which means they pay less in federal income tax, Social Security, and Medicare taxes. The funds still go straight into their HSA account—just without being taxed first. These contributions are also reported on the W-2 (not as taxable wages) and count toward the IRS annual HSA contribution limit.

Example: Saving $2,000 for Medical Costs

Imagine a healthy family of four expects up to $2,000 in medical expenses for the year. The employee is paid biweekly and wants to set aside enough in their HSA to cover those potential costs—whether they end up using the full amount or not.

With 26 pay periods in a year, $2,000 ÷ 26 equals about $77 per paycheck. This means the employee would have $77 deducted pre-tax from each pay—on top of their regular health insurance premium—to build that $2,000 HSA balance over the year.

On the employer side: After each payroll, move the total employee HSA contributions into your obligation account and either schedule or initiate the transfer to the HSA provider. A great “sanity saver” is to keep at least one month’s worth of expected health insurance premiums and HSA contributions in that obligation account at all times. That way, you’re never scrambling for funds when payments are due and it is ok if it takes you time to build those funds up! What we don’t want you to do is scramble to pay everytime payroll is run. Have a little reserve built up first then you’re ready to run benefits like these easily. 

Want to know more about slowly building a payroll reserve over time? Click here

In short: You set your budget, we set up the deductions, and our partner Sirak Financial helps you choose a plan that fits both your needs and your team’s.