You choose a benefit type when you add a benefit. Go to People from the sidebar, click the employee's name, and open the "Benefits" tab. Find what your company offers in this article, then pick the matching type.
If you are not sure which type matches your plan, ask your plan provider or accountant, or contact Freedom support at [email protected].
Health and other insurance (Section 125)
Pick one of these when the employee pays their share of an insurance premium through a Section 125 plan. Section 125 means the employee's share comes out of their pay before taxes. If you do not know whether your plan is a Section 125 plan, or the premium is not taken before taxes, ask your plan provider or accountant before you pick a type.
Medical (Section 125)
Dental (Section 125)
Vision (Section 125)
Disability insurance (Section 125)
Accident insurance (Section 125)
Cancer insurance (Section 125)
Critical illness insurance (Section 125)
Hospital indemnity (Section 125)
Life insurance (Section 125)
Other medical (Section 125): a medical plan under Section 125 that is none of the types above
Retirement plans
Pick the type that matches the name of your retirement plan. The types without Roth in the name are for traditional contributions, which are taken before income tax.
401(k)
401(a)
403(b)
457(b)
SIMPLE IRA
Pick a Roth type when the employee makes Roth contributions. Roth contributions are taken after income tax.
Roth 401(k)
Roth 403(b)
Roth 457(b)
Roth SIMPLE IRA
FSA and HSA accounts
Pick one of these when money from payroll goes into a flexible spending account or a health savings account.
Medical FSA
Dependent care FSA
HSA
Commuter benefits
Pick one of these when your company has a commuter plan for transit or parking costs.
Commuter transit
Commuter parking
Other benefits
Pick one of these only when your plan provider or accountant tells you that your plan is this kind.
Non-taxable fringe benefit
Deferred compensation (NQDC): a non-qualified deferred compensation plan
Personal use of company car
What is not a benefit
Garnishments, child support, and other deductions taken after taxes are not benefits. Add them on the employee's "Post-Tax Deductions" tab. The post-tax deduction types are:
Garnishment
Child support
Miscellaneous: any other deduction taken after taxes, such as a loan repayment
See "Manage post-tax deductions" for the steps.
Owners of more than 2% of an S corporation
There is no separate benefit type for these owners. Use the same benefit types as for other employees. The difference is a setting on the employee, shown in their profile as "Owns more than 2% of the company". It changes how their benefits are taxed.
To set it, go to People from the sidebar, click the employee's name, and open the "Tax Setup" tab.
When you add a new employee, the "2% shareholder status" step asks the same question. You can skip it and set it later from the "Tax Setup" tab.
Count stock owned by the person's spouse, children, and grandchildren as their own.
Freedom shows this setting only for companies it applies to. If you do not see it, it does not apply to your company type.