Reimburse Employees

Reimbursing employees for expenses, such as insurance or per diem, can be done in the Payroll module instead of the Accounts Payable module without including these amounts in gross wages for W-2 purposes.

To reimburse employees

Select Payroll Setup menu > Deduction Code Maintenance.
In the Deduction Code field, enter the new deduction code. For more information, see Deduction Code Maintenance - Fields.
In the Description field, enter the description for this code.
In the Deduction Type field, select Standard Deduction.
In the Calculation Method field, select Fixed Amount.
In the Standard Amount field, enter the standard reimbursement amount, if applicable. This amount can be overwritten during data entry. Be sure to enter the amount as a negative number in order to add the amount back into the employee’s earnings.
In the Deduction Accrual Account field, select the general ledger account to which you want the reimbursement posted.
Click Accept.
Select Payroll Main menu > Payroll Data Entry.
Enter the employee information, and then click the Lines tab. For more information, see Payroll Data Entry - Fields.
In the Type field, select the new deduction code.
In the Amount field, enter the amount of the reimbursement as a negative number or accept the standard amount.
Click Accept.

When checks print, these negative deductions are printed with taxes and other deductions as a negative total. These amounts will not be included with the employee’s total wages, nor will these amounts affect the taxable wages for state and federal withholding purposes.