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South-Port
March 12, 2019
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How to deduct employee personal expenses from payroll

  • March 12, 2019
  • 1 reply
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One of our employees made a personal purchase on a company credit card.  How do we deduct it from their pay cheque?

Best answer by qbteachmt

You post Banking menu > Enter Credit Card Charge for that Employee name as "purchased from" and on the expenses tab, you list Other Current Asset = loaned to employee. No details, never hits your P&L, no real payee, etc.

Now you will set up a Payroll Deduction item from Net pay, as a wage garnishment. Instead of linking this to a liability, you link it to that Other Current Asset account as an employee loan or advance Repayment. It reduces their takehome, but does not affect any other tax computations.

You deduct it until the loan is Paid in full.

1 reply

qbteachmt
qbteachmtAnswer
March 12, 2019

You post Banking menu > Enter Credit Card Charge for that Employee name as "purchased from" and on the expenses tab, you list Other Current Asset = loaned to employee. No details, never hits your P&L, no real payee, etc.

Now you will set up a Payroll Deduction item from Net pay, as a wage garnishment. Instead of linking this to a liability, you link it to that Other Current Asset account as an employee loan or advance Repayment. It reduces their takehome, but does not affect any other tax computations.

You deduct it until the loan is Paid in full.

F
fl3tty
June 25, 2019

"Instead of linking this to a liability, you link it to that Other Current Asset account as an employee loan or advance Repayment."

 

Quickbooks online is only allowing me to select a Liability or Expense account to link the deduction to, and not an asset? 

JessT
JessT
June 25, 2019

I got a way to record your reimbursement, fl3tty. We'll continue the instructions shared by qbteachmt.

 

While you're unable to assign the Other Current Asset account to your reimbursement item, you can transfer the funds from that account to the account assigned to the reimbursement item. The amount will be offset when you get the reimbursement through a paycheque transaction.

 

Please have this checked with an accountant.

 

Feel free to post back if you have additional questions with your payroll.

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