Use this article to fix a past payroll that included the wrong benefit amount. To fix future benefit amounts, edit the benefit directly.
You can fix past amounts yourself for most medical, dental, vision, and investment benefits, including non-integrated 401(k) plans and shareholder benefits. You need payroll permissions to make these corrections. Depending on what you need to fix, we might need to finish the correction for you. If so, we’ll let you know.
We need to fix past amounts for you if they involve any of the following benefits.
Health benefits managed in Gusto, including plans connected through a broker integration
A qualified small employer health reimbursement arrangement (QSEHRA)
An integrated 401(k)
Benefits on a non-Gusto payroll (usually wages from before you joined Gusto)
Benefit changes for a dismissed employee
To ask for help, contact us through Help in the menu under your name.
Before you process a benefit correction, make sure the following are true.
The benefit is set up and active in Gusto.
The employee who needs the benefit correction is actively enrolled in the benefit.
If you need to correct a benefit for a dismissed employee, contact us through Help in the menu under your name so we can assist.
You processed at least one payroll with benefits reported for the impacted employee (employee deductions or employer contributions).
The benefit deduction amount does not exceed the wages for that pay period.
The benefit correction tool has five parts, called Select employees, Choose benefits, Select payrolls, Enter new amounts, and Review and submit.
To fix a benefit amount, follow these steps.
Go to the Pay section.
On the right side of the page, click See more options.
Click Request a benefit correction.
Review how benefit corrections work, and then click Get started.
Select the employees who need a benefit correction by clicking the + next to their name. To select everyone, click Add all.
Click Save & continue.
Select the benefits that need to be fixed.
You can correct amounts for each selected employee who has one or more of the benefits you choose.
If you do not see a benefit you need, we may need to fix it for you. Click Contact us in the box next to the list.
Click Save & continue.
Select the payrolls that need the benefit amounts corrected.
You can select payrolls going back to the beginning of the previous calendar year. To select all payrolls, click Add all.
If you correct a payroll in a quarter or year we already filed, we file the required amended returns for your business and generate W-2Cs for affected employees.
If you joined Gusto after the quarter you’re correcting, we can generate W-2Cs, but we cannot amend that quarter’s filing. You need to amend it outside Gusto.
Click Save & continue.
Tell us what the benefit amounts should have been in the New amount columns.
If you leave a field empty, the benefit amount does not change.
You can use Group by to group the corrections by employee, benefit, or payroll date.
For fringe benefits, adjust the employer contribution amount if the correction should affect the employee’s taxable wages. We adjust employee deductions post-tax.
For non-integrated 401(k) contributions, adjusting the employee’s pre-tax contribution changes their taxable wages and W-2 reporting. Adjusting the employer’s contribution does not, because employer 401(k) contributions do not appear on the employee’s W-2.
For pre-tax health insurance, adjusting the employee’s deductions changes their taxable wages and tax amounts. We report both the employee and employer amounts on the W-2.
After you enter the new employee and employer amounts, click Save & continue.
Important: If you click Go back before you click Save & continue, we do not save the amounts you entered. To save your work, click Save & continue first, and then click Go back to add more information.
Review the Summary of what to expect from your benefit correction at the top of the page. It tells you the following.
Whether you need to recover money from your employees
Whether you owe your employees money back
Whether we need to debit your company account, and if so, how much and when
If you need to make changes, click Go back. We save your progress, so you do not lose your work.
Under Detailed review, expand Review benefit correction amounts and Review changes to employee and company taxes to confirm the new amounts and see how the correction affects taxes. The Submit changes button appears above these sections, so review both before you submit.
Benefit corrections usually change taxes. We withhold and pay the changes to employee and company taxes, except for state and federal income taxes.
By default, we do not withhold or pay state income tax (SIT) or federal income tax (FIT) from a benefit correction, because late payments of these taxes may lead to penalties and interest.
Employees reconcile SIT and FIT when they file their annual income taxes. They get a refund if they overpaid or owe more if they underpaid.
To have us withhold and pay SIT and FIT anyway, click More in the How does a benefit correction affect taxes? box, select I want Gusto to withhold and pay SIT and FIT anyway, and follow any remaining prompts.
After you review everything, click Submit changes.
Click Benefit correction summary to review any follow-up tasks from this correction. You also see these tasks as to-dos on your Home page.
From the benefit correction summary page, you can update the status of each follow-up task as you finish it.
After you submit a benefit correction, the summary page lists any follow-up tasks. Expand the sections below to see how to finish them.
If you owe employees money, expand Reimburse employees.
If you need to recover money from employees, expand Recover funds from employees all at once or Recover funds from employees over a period of time.
To view your follow-up tasks and correction history, follow these steps.
Go to the Pay section.
At the top right of the page, click View pay history.
Click the Other tab.
Click the submission date of the benefit correction to see the summary.
Review any tasks that need attention. After you finish a task, select its checkbox to clear it.
You can reimburse each employee individually, or you can import the CSV that we created for you.
To pay with the CSV, follow these steps.
Go to the Benefit correction history page.
Select View next to the correction you need to follow up on.
In the list of tasks, download the CSV of amounts to pay.
Go to the Pay section.
Choose the payroll for the reimbursements.
To include them in your next regular payroll, click Run on the payroll under Up next.
To pay them in a separate payroll, click Run an off-cycle payroll under More options.
On the first step of payroll, click Import payroll data.
Click Upload, and choose the CSV file you downloaded in step 4.
Click Upload and continue, and follow the prompts to finish the import. To learn more, review Run payroll with Smart Import.
Review the imported amounts, and then continue processing payroll.
Important: Check your state laws to make sure you’re recovering funds compliantly. Each state has its own rules, and it might not be legal to deduct this money from payroll. If you’re unsure, check with your certified public accountant (CPA).
After you confirm that the deductions are compliant, you can recover the funds from employees as a lump sum. To do this, follow these steps.
Go to the Benefit correction history page.
Select View next to the correction you need to follow up on.
Download the CSV of amounts to recover.
Go to the Pay section and select Run payroll.
On the first step of payroll, find an employee who needs a deduction.
The CSV shows how much you need to recover. We cannot make these deductions automatically because of the legal implications.
In that employee’s row, click the field in the Deductions column.
Click Add a one-time deduction.
In the Description field, enter a name for the deduction, like Benefit correction.
Under Amount to withhold, enter the amount from the CSV. Make sure Amount Type is set to Fixed amount.
Click Save.
One-time deductions are always post-tax.
Repeat steps 6 – 11 for each employee on the CSV.
You can set up a recurring deduction in the employee’s profile to spread the repayment over multiple payrolls. The deduction starts with the employee’s next pay period.
Important: Check your state laws to make sure you’re recovering funds compliantly. Each state has its own rules, and it might not be legal to deduct this money from payroll. If you’re unsure, check with your certified public accountant (CPA).
After you confirm that the deductions are compliant, you can set up the recurring deduction. To do this, follow these steps.
Go to the Benefit correction history page.
Select View next to the correction you need to follow up on.
Download the CSV of amounts to recover.
Go to the People section.
Click the name of the employee who needs the deduction.
In the Garnishments or custom deductions section, click Add.
Click Custom Deduction (Post-Tax).
In the Description field, enter a name for the deduction, like Benefit correction.
Under Frequency, make sure Recurring deduction (every payroll) is selected.
Under Percent or Fixed, select Fixed amount.
Under Amount to Withhold, enter the dollar amount per pay period that you want to withhold.
Under Annual Maximum, enter the total amount you need to recover from the employee for check dates in the current calendar year.
Important: The Annual Maximum resets for payrolls with a check date in a new calendar year. For example, a payroll with a Jan 2 check date starts a new annual maximum. If your recovery continues into the new year, review the deduction before you run your first payroll of the year.
Click Save & continue.
If you correct a payroll from a quarter or year we already filed, we file the required amended returns for your business and generate W-2Cs for the affected employees. To learn more, review our amended returns article.
If you joined Gusto after the quarter you’re correcting, we can generate W-2Cs, but we cannot amend that quarter’s filing. You need to amend it outside Gusto. For example, if you joined Gusto in Q2 and need to correct a Q1 payroll, you need to amend the Q1 filing yourself.
If you do not need to add missing benefits to Gusto, here's how to remove the task on your dashboard:
Under Tasks, find the one called Review and add any missing benefits to Gusto.
Click Start.
On the right side of the task's page, click the three dots ⋮ icon.
Select Dismiss.