Your employees may incur legitimate business that you've agreed to reimburse, such as mileage or accommodation costs for attending business meetings and conferences. These reimbursements are usually nontaxable. Many companies have agreements under which employees are reimbursed at established intervals. You can reimburse employees' expenses by creating a QuickBooks Payroll item and then track the expense payments by assigning them to a company expense account.
Click "Lists" in the main menu bar. Select "Payroll Item List" from the pull-down menu.
Click the "Payroll Item" button and then select "New" followed by "Custom Setup." Click the "Next" button.
Click "Addition" from the list of item types and click "Next."
Select an expense account from the list of available expense account types, such as the mileage or travel accounts.
Click "Tax Tracking" and select "None" to ensure that the reimbursable expense is not included as taxable income. Click "Next."
Check the "Based on Quantity" box if the expense is unit-based, such as an amount paid per mile. Click "Next."
Click to select "Calculate on Net Pay." Click "Next."
Type the default rate for the expense payment. Click the "Finish" button
Click the "Employees" tab on the top menu bar and select "Employee Center" in the drop-down menu.
Double-click the employee's name in the list of employees.
Click the "Payroll and Compensation Info" tab.
Click the "Additions, Deductions and Company Contributions" menu button. Select the payroll item you created earlier to add it to the employee's paycheck.
When creating the paycheck at the end of the pay period, the expense item will display in the "Other Payroll Items" area of the Preview Paycheck page. If you selected a unit-based quantity when setting up the payroll item, make sure you enter the correct amount in the "Quantity" column of this screen.
The information in this article applies to QuickBooks Premier and QuickBooks Pro. It may differ slightly or significantly with other versions of the program.