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:

  1. Navigate to the People tab.
  2. Click on your employee's name.
  3. Click edit next to the Employment Details section.
  4. Select Yes or No next to 2% Shareholder.
  5. Click Save.

If you have questions and your benefits are managed by Gusto, reach out to our Benefits Care team at my-benefits@gusto.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 support@gusto.com.

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