How do I charge Per Diems to my customers and pay them to the employee?

It's important to charge customers correctly for per diems, @jimmers.inbox. For specific advice, please consult a tax professional. We can help with setting up pay types in QBO. To determine as well if the per diem amounts are taxable or fall within HMRC's approved rates for business travel making it Non-taxable.

If confirmed that it's non-taxable and they won't show up in relevant tax forms you can just create an Expense to pay yourself, then make it billable to the customer so that you can convert it to an Invoice. 

Here's how:

1. Click on + New.
2. Choose the type of transaction (Bill, Expense, or Cheque) you want to create.
3. Select the payee.
4. In the Category column, choose the expense account for the transaction.
5. Input the description and amount of the expense, then check the Billable checkbox.
6. In the Customer column, select the customer you want to charge for this expense.
7. (Optional) Verify or input the correct markup percentage.
8. Save and Close.

If it's non-taxable and still needs to show up in employee records, you need to set up a Reimbursement pay type: Add bonus, holiday pay, and other pay types in QuickBooks Online Standard Payroll. Then, invoice.

If the per diem amounts are taxable, you should create a separate pay type (Other earnings) and invoice those amounts separately.

Here's how:

1. Click on Add next to Car Allowance or Commission.
2. Modify the Name of the earning if necessary.
3. Enter a Default amount if it is the same for each pay period. You can change this amount when processing payroll.
4. If the amount varies, do not input a default amount.
5. Save the modifications and close the window.

To understand more about supported pay types and deductions in QBO Payroll, please refer to this article: Supported pay types in QuickBooks Payroll. 

For future reference, you can check this article as a guide on how to manage auto payroll: Set up and manage Auto Payroll in QuickBooks Online Core Payroll. 

Is there any confusion about your per diems? You can always circle back in this thread. We will respond efficiently.