How to change your employee's S-Corp owner status
If an employee's status as an S-Corp 2% Shareholder changes as any time, you can update this in your employee's profile. It is important to accurately enter an employee-owner's 2% shareholder status, because this affects how their health insurance premiums are taxed.
To make an update:
- Navigate to the People tab.
- Click on your employee's name.
- Click edit next to the Compensation section.
- Select Yes or No next to 2% Shareholder.
- Click Save.
If you have questions and your benefits are managed by Gusto, reach out to our Benefits Care team at email@example.com. If your benefits are managed externally and you have questions about the payroll implications of your S-Corp status, reach out to our Payroll Care team at firstname.lastname@example.org.