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Set up employees and payroll items

Set up a non-taxable reimbursement payroll item

Use the following steps to set up a payroll item that you can use to reimburse employees or independent contractors when they incur non-taxable expenses, such as car rentals or hotel accommodations while traveling for business. Typically, these expenses qualify as tax-deductible for the employer.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Select the client, and then
    Add
    .
  3. Enter a description for the item and then select
    Pay
     in the
    Type
     field.
  4. Select the calculation type (typically this is
    Fixed Amount
    ).
  5. For independent contractors, select
    Nonemployee reimbursements
     in the
    Special Type
     field.
  6. Mark the
    Amount from gross pay presentation
     checkbox if you don't want the reimbursement amount included in the gross pay.
  7. For employees, select
    All
     in the
    Accruable benefits
     and
    Workers' compensation
     fields in the Exclusions section (this is appropriate in most cases, but not all).
  8. Go to the Tax Exemptions tab, and mark the checkboxes for any taxes the reimbursement amount should be excluded from.
  9. Select
    Enter
     to save the payroll item.
  10. Select
    Setup
    , then
    Employees
    .
  11. On the Payroll Items tab, mark the checkbox to activate the reimbursement item for the employee or independent contractor.

This article applies to:

  • Product: Accounting CS Client Access
  • Subject: Payroll checks