Set up third-party disability insurance

Disability insurance pays an employee a portion of their compensation if they’re unable to work due to illness or injury (such as giving birth or a prolonged illness).

If you offer medical insurance through Gusto, you can set up new disability insurance through Gusto

If you offer disability insurance through a broker outside of Gusto (a third party), use this article to record the insurance policy, employee deductions, employer contributions, and any payouts. Then we’ll deduct employees for their portion of the premiums and take care of associated tax reporting and filings on your behalf. 

Taxability: Company contributions are always pre-tax, and employee deductions can be either pre-tax or post-tax. Check out IRS Publication 15-A to learn more about the taxability of third-party disability insurance.