Paycheck Expense Reimbursement

In order to include an Expense Reimbursement on a paycheck, you can:

  • Click Payroll Categories > Deductions (in the Payroll Command Center).
  • Click New and set up a deduction called Employee Expense Reimbursement.
  • In the Linked Payable Account field, enter the expense account that you want to use.
  • If you need to create a new account to track expense reimbursements, click the New button in the account "Select From List" window and then enter the appropriate information for that expense. A message will appear informing you that the account for deductions withheld is usually a liability account. Click OK.
  • In the Type of Deduction section of the window, select User-Entered Amount per Pay Period.
  • Since it’s a reimbursement of actual expenses, select No Limit in the Deduction.
  • Click on the Employees button, and put a check mark to the left of the applicable employees' names.
  • Click OK.
  • When you write the paycheck that includes an expense reimbursement, click to Select and Edit the paycheck in the payroll process.
  • On the check, enter the amount of the expense reimbursement as a Positive amount, even though the other deductions will be negative amounts.

Warning: If you are unsure whether the reimbursable expense should be taxed or not taxed, ask your accounting professional.