How to Add a Flexible Spending Account (FSA) Benefit
Last modified 6/18/2020 8:22:14 AM EST | Added by Paywow Team

Applicable To
Complete Payroll Contractor Pay Employees Contractors

Employees enrolled in a Flexible Spending Account (FSA) can get reimbursements for their qualifying medical expenses that aren’t covered by other insurances. From the beginning of the year, employees may choose to contribute an amount to the FSA during each payroll. The employer also contributes to the FSA for each employee. Both the employer and employee receive certain tax advantages based upon their contributions to the FSA.

For each payroll, PayWow includes the employee's FSA deductions and employer's contributions toward the FSA total until the employee's maximum annual limit is reached.

Here how to set up an FSA benefit plan:

  1. Go to Benefits and click Set Up a New Benefit.
  2. Select Flexible Spending Account-Medical (pre-tax) under Health and Life.
  3. On the Benefit Details page, 
    1. Enter Benefit Name and Annual Maximum Contribution.
    2. Select Contribution Mode as By Percentage/Fixed Amount.
    3. Based on the selection, enter the Contribution. 
    4. Click Save & Continue.
  4. On the Select Employee(s) page, 
    1. Select Employee(s) to link with the benefit plan.
    2. Click Save & Continue.
  5. On the Employee contribution page,
    1. Enter Employee Maximum Contribution and Prior Contribution details.
    2. In Employee Contribution, select % (Percentage) or $ (Dollar) to enter the contribution amount per pay period.
    3. Click Save & Continue.

The added FSA will be listed under the Benefits menu for any enrolled employee. The deductions for the FSA will occur while running payroll.

The employees’ FSA deductions and the company's contributions for each payroll will be reflected on the employees’ pay stub under pre-tax deductions and contributions.

To learn how to add a Health Savings Account (HSA) benefit, click here

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