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bspeed
January 17, 2019
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Repay employee for expense

  • January 17, 2019
  • 2 replies
  • 0 views

How do I properly add in a repayment to an employee for buying something for the company with their own money? And then correctly account for this on the chart of accounts/ P&L?

Thanks!

Best answer by

Hey there, bspeed,

 

I can help you repay your employee's business-related expenses.

 

You can create a non-taxable reimbursement item then add assign the correct expense account for the repayment. Once done, you can now add the item to your employee's paycheck. Let me guide you through the process:

 

Step 1: Add a new payroll item.

  1. Click the Lists menu.
  2. Choose Payroll Item List.
  3. Right-click anywhere and select New.
  4. Choose Custom Setup and click Next.
  5. Select the Addition item type, and select Next.
  6. Enter the name of the item and click Next.
  7. On the Expense account window, choose the correct account you'd like to reflect in your P&L report.
  8. Click Next.
  9. Set the Tax Tracking type to None so that the amounts do not report on tax forms, select Next.
  10. Select Next.
  11. Click Neither and click Next.
  12. Choose to calculate on net pay, select Next.
  13. (Optional) Enter a Default Rate, select Finish.

Step 2: Add the item to your employee'c paycheck.

  1. Go to the Employees menu.
  2. Choose Pay Employees.
  3. Select Unscheduled Payroll.
  4. Click the employee name and select Open Paycheck Detail.
  5. If you aren't processing the regular payroll, remove all the Earnings items.
  6. Add the reimbursement item on the Other Payroll Items section. (Please see screenshot)
  7. Click Save & Close.
  8. Choose Continue.
  9. Select Create Paychecks.

That should get things done for you, bspeed. Please check out this article to know more about adding a non-taxable reimbursement payroll item: Create a non-taxable reimbursement payroll item in QuickBooks Desktop Payroll

 

Please let me know if you have any questions. I'm always here to help you whenever you needed help. Have a good day!

 

2 replies

P
Pete_Mc
January 17, 2019

I do it the same as any other purchase...

 

If you want to be able to run Reports on what you paid each of them, then set them up as a Vendor (even if they're already in as an Employee) and when you repay them (Cash or Check), use the correct Expense Account for whatever the purchase was for.  For a reminder you can put something like "Reimbursement: [Item(s)]" in the Memo field.  (Notes like that help the Accountant too when they see the same name it two places.) 

 

If the amounts are small (your choice as to what is "small" in your business), just pay them Cash and enter the Store/Vendor and Expense Account as if you went out and bought it.  If the "Business" is buying something, it just needs the Vendor, Amount and Expense Acct be tracked properly.  It doesn't matter who's hands actually carried the cash to the store.

 

Only caveat if they're in as a Vendor and Employee, don't mix them up.

L
LisaAZ
December 16, 2024

what if they want me to use our Company Credit card to buy something as reimbursement to them for an expense. They have a different expense/ bill already entered set up as a vendor.  How do I reduce that amount and account for the credit card purchase?  Example:  Employee is set up as vendor and the company owes them 60.00 in an expense in QB.  Normally I would just cut a check for the 60.00 to pay him back. But He asked me to purchase something with the company card for 50.  now I only owe him 10.00.  How do I reflect that on the expense/ Bill that was already entered for 60.00 

A
Anonymous
Answer
January 17, 2019

Hey there, bspeed,

 

I can help you repay your employee's business-related expenses.

 

You can create a non-taxable reimbursement item then add assign the correct expense account for the repayment. Once done, you can now add the item to your employee's paycheck. Let me guide you through the process:

 

Step 1: Add a new payroll item.

  1. Click the Lists menu.
  2. Choose Payroll Item List.
  3. Right-click anywhere and select New.
  4. Choose Custom Setup and click Next.
  5. Select the Addition item type, and select Next.
  6. Enter the name of the item and click Next.
  7. On the Expense account window, choose the correct account you'd like to reflect in your P&L report.
  8. Click Next.
  9. Set the Tax Tracking type to None so that the amounts do not report on tax forms, select Next.
  10. Select Next.
  11. Click Neither and click Next.
  12. Choose to calculate on net pay, select Next.
  13. (Optional) Enter a Default Rate, select Finish.

Step 2: Add the item to your employee'c paycheck.

  1. Go to the Employees menu.
  2. Choose Pay Employees.
  3. Select Unscheduled Payroll.
  4. Click the employee name and select Open Paycheck Detail.
  5. If you aren't processing the regular payroll, remove all the Earnings items.
  6. Add the reimbursement item on the Other Payroll Items section. (Please see screenshot)
  7. Click Save & Close.
  8. Choose Continue.
  9. Select Create Paychecks.

That should get things done for you, bspeed. Please check out this article to know more about adding a non-taxable reimbursement payroll item: Create a non-taxable reimbursement payroll item in QuickBooks Desktop Payroll

 

Please let me know if you have any questions. I'm always here to help you whenever you needed help. Have a good day!

 

    qbteachmt
    qbteachmt
    January 17, 2019

    @196027

     

    Please learn from thins input; they want and need to track What it is. The concept of "reimbursement" is a Process; not the Accounting. If they need to track reimbursement of Office Supplies and Stamps, that is not just one Reimbursement. That's the problem with your Payroll answer.

     

    You don't set up Employees also as vendors, @Pete_Mc At least, not in the US; that makes it look like they are running their own Business. We need the reimbursement to the Employee name as Payee to show as Employee name, since it has to fall under the terms of An Accountable Plan per the IRS.

     

    @bspeed

     

    Enter a Check Expense to the Employee Name as payee, and list everything here that you "bought"  from them as reimbursement. I bring printer paper and stamps to the office, you enter the two split details in the check to repay me. Or, the "check expense" to show you paid me from Petty cash. Make sure to get their receipts.

     

    In Desktop, the Employee Center, these are shown as Non-payroll Transactions.

      T
      tandy164
      July 30, 2020

      Hi:  What do you mean by'We need the reimbursement to the Employee name as Payee to show as Employee name, since it has to fall under the terms of An Accountable Plan per the IRS.'

       

      Do you mean I can include the employees reimbursement within their bi weekly paycheck?  Or do you mean something else by Payee?

       

      I was about to create an 'Other Name' list to reimbursment my employee.

       

      So is the Payroll one right?

       

      Thanks.

       

       

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