Benefits deduction corrections
Note: If your company manages your benefits outside of Gusto, you need to correct deductions manually.
If we manage your company’s benefits (including broker integration) and a deduction was missed, we’ll correct it by applying the missed amount to upcoming payroll(s). These deductions cannot be manually skipped.
For Gusto-managed benefits, we’ll automatically apply benefit deduction corrections if:
Your company’s benefits (a new policy or a renewal) were not approved by the carrier until after coverage started.
An employee was skipped on payroll.
A qualifying life event (QLE) resulted in a benefit being back-dated.
Example: A baby is born, but benefits were not added until several weeks later.
Unintentional processing errors or incorrect rates were used.
A newly hired employee enrolled in benefits after coverage started.
An employee did not have enough pay to cover all taxes and deductions.
The way corrections apply depends on the type of benefit deduction that was missed.
Contact us if you have questions or do not want these deduction corrections to occur. To contact us, sign in to your Gusto account and click the help icon 
in the top-right corner of the page.
If an employee’s health benefits deductions were missed, we’ll apply 1.5x the normal deduction amount to upcoming payrolls until the missed amount is covered. This is listed in a line item under the benefit called "Correction." For every payroll with missed deductions, it takes two payrolls to catch up at 1.5x.
For example, if we missed one deduction that's regularly $100 per paycheck, we’ll deduct $150 from the next two payrolls—$100 for the regular deduction and $50 toward the missed amount. Once the missed amount is covered, we’ll only deduct the regular amount moving forward.
2% shareholder deductions will be taken from the shareholder’s first paycheck after benefits begin as imputed pay. Because the IRS does not allow shareholders to take part in employer-sponsored (pre-tax) health benefits, the full amount will be added to the following paycheck because imputed pay is subject to federal and state income taxes.
If you have a Health or Dependent Care Flexible Spending Account (FSA), we’ll spread the missed amount equally across the rest of your deductions throughout the plan year.
If you miss your first Health Savings Account (HSA) or commuter deduction of the month, we’ll apply your full monthly amount to the remaining payroll(s) that month. If the missed amount cannot be fully covered in the same month, we’ll apply corrections to future payrolls until you’re caught up.
If benefits were over-deducted (for example, a Qualifying Life Event (QLE) was submitted or processed late), we’ll create a benefit reversal. In this case, we’ll email you the correction details and any actions you need to take.