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Benefits deduction corrections

If your benefits are managed by Gusto and a deduction was missed, we’ll apply corrections to upcoming payroll(s) to make sure the missed amounts are caught up.

These situations are quite common, here are a few examples: 

  • A company’s benefits (a new policy or a renewal) aren’t approved by the carrier until after coverage has already started. 

  • An employee is skipped on payroll. 

  • Qualifying life events that result in a benefit being back-dated (example: a baby is born but benefits aren’t added until several weeks later).

  • Unintentional processing errors and/or incorrect rates being used.

  • A newly hired employee enrolls in benefits after the date coverage started.

Missed health benefit deductions

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 captured.

  • For example, if we missed 1 deduction that is normally $100 per paycheck, the next two payrolls will have $150 deducted. Once the full amount is captured, only the regular deduction amount will be applied moving forward. 

Missed 2% shareholder benefit deductions

2% shareholder deductions will be taken from the shareholder’s first paycheck after benefits begin as imputed pay. Because the IRS does not permit 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.

Missed health or dependent care FSA deductions

If you have a Health or Dependent Care FSA, missed deductions will be adjusted and equally apply to the rest of your deductions throughout the plan year.

Missed HSA or commuter benefit deductions

If you miss your first HSA or commuter deduction of the month, you'll see your full monthly election applied to the remaining payroll(s) of that month. If the deductions cannot be fully caught up in the same month, the corrections will continue to appear on future payrolls until caught up.

Payroll, benefits, HR and more.