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    Create a non-taxable reimbursement payroll item

    Article ID: 1000524


    Learn how to create a Non-Taxable reimbursement payroll item for items such as mileage, travel or non-taxable insurance reimbursements.

    Expected Outcome

    The employee will be reimbursed.


    You know how much reimbursement you would like to give to the employee.


    To create reimbursement item:

    Add a new payroll item.

    1. From Lists on the top menu bar, click Payroll Item List.
    2. Click the Payroll Item button, and select New.
    3. Click the Custom Setup option button, and click Next.
    4. Select the Addition item type, and click Next.

    Set up the new item.

    1. Select an expense account to track travel or mileage amounts, or if this will be an advance to the employee, choose an asset account.
    2. Set the Tax Tracking type to None so that the amounts do not report on tax forms, click Next.
    3. For amounts paid per mile, select the Based on Quantity checkbox, click Next.
    4. Select to calculate on net pay, click Next.
    5. Enter a Default Rate, click Finish.

    Add the item to the employee's record.

    1. From Employees on the top menu bar, choose Employee Center.
    2. Double-click the employee's name.
    3. Go to Payroll Info tab.
    4. Add the item from the drop-down list under Additions, Deductions, and Company Contributions.

    When creating paychecks, the addition item will appear in the Other Payroll Items area of the Preview Paycheck screen. If the item is based on quantity, be sure to enter the appropriate amount in the Quantity column.

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