An employee with a 2% or greater share in an S-Corp or a C-corp or LLC that is taxed as an S-Corp is entitled to health insurance benefits but must pay the taxes applicable to the employer's contribution toward the premium.


To learn more about tax collection and how employees with 2% shareholder status are taxed in PayWow, click here.


Here's how to change an employee's status to 2% shareholder:


  1. Go to Directory >> Employee.
  2. Select an employee for whom the status needs to be changed.
  3. Click the View Compensation History icon under Compensation Details and click the edit icon.
  4. Select Yes for 2% Shareholder.
  5. Click Save.