Skip to main content
N
nomij
June 8, 2020
Question

How do I pay employee mileage (a per km allowance) with QBO Payroll?

  • June 8, 2020
  • 1 reply
  • 0 views

How do I pay employee mileage (a per km allowance) with QBO Payroll?

As per CRA this type of allowance per km is NOT taxable or pensionable:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/automobile-motor-vehicle-allowances/reasonable-kilometre-allowance.html

The only allowance option I see on QBO Payroll is marked as "Pensionable and Taxable".

Why can we not make our own pay types like QBD?

 

I did try to search my answer, but the search bar, in the Canadian forum, takes me to the US forum.  

The help on QBO Online shows a chart, but only half of the chart shows.

Please provide the details of how to pay employee mileage (a per km allowance) with QBO payroll that is non taxable and non pensionable as per the CRA requirements linked above.

Thank you.

1 reply

AddieC
AddieC
June 8, 2020

Hi there, 

 

Running a small business with QuickBooks Online means that you'll save tons of time with your bookkeeping needs. With the addition of payroll, you'll be able to take advantage of even more time-saving benefits. I'd be happy to explain which pay types are taxable and non-taxable if you're using QBO Payroll. 

 

If your employees are paying for their mileage expenses, you'll want to issue a reimbursement rather than an allowance. Reimbursements are nontaxable payments to an employee used to repay business-related expenses that the employee has paid out-of-pocket.

 

Don't include expenses that have tax implications, such as moving expenses. Typically this includes expenses incurred for limited or regular business travel.

 

Because these payments aren't taxable, they don't appear on payroll tax or other tax reports. They're also not included in the wage base used to calculate percentage-driven deductions.

 

You can add multiple reimbursement pay types and keep the default name we provide or give them each a unique name. In addition to being available for this employee, the custom pay types will also be available when you add or edit your other employees.

 

For more information about the different pay types in QBO, take a look at this article: Supported pay types and deductions explained.

 

I hope this helps shed some light on this for you. If you have any other questions, please reach out to our tech support team for further assistance. 


Cheers. 

M
MJM3
October 14, 2021

Currently in QuickBooks Online, I have to manually multiply the km driven by whatever rate I am using, every time I run payroll, and fill in the total reimbursement amount.

It would be far more efficient if I could set a per km allowance rate for each employee, and then just fill in the actual km driven when doing payroll so that QBO can calculate it for me.

I could easily set this up in QuickBooks Desktop. Why isn't it available in QuickBooks Online?

J
JamesM4
October 14, 2021

Hello MJM3. Glad to have you chime in on this. Your feedback is valuable and it's important your voice is heard. The functionality you've described isn't available yet in QuickBooks and I encourage you to send feedback about this directly to our engineers. You can do this by clicking the Gear icon and looking for Feedback. New product ideas and improvements are based on the valuable feedback we get from users like you. Let me know if you have other questions, I'm here to help. 

Terms & ConditionsAccessibility statement