It is fairly common to have to reimburse employees for the miles they drive on the job and any supplies they may need to pick up for their programs. You can write separate checks to reimburse them but many employees would prefer that their reimbursements be included in their direct-deposited paycheck. It is easy enough to add expense reimbursements to payroll — all you need to do is add new payroll items to your list of available options. To do this in QuickBooks:
From the top menu bar go to the LISTS menu.
Click Payroll Item List
Click the Payroll Item button at the bottom of the list and
Click New Item
Select the EZ Setup, click Next
For Payroll Item Type, select Other Additions, click Next
Select either Mileage Reimbursement or Miscellaneous Addition for expense reimbursements, click Next
This creates a new item on your Payroll Item list that you will go back in and edit to make sure it is named properly and points to the correct account.
From the top menu bar go to the LISTS menu.
Click Payroll Item List
Highlight the new addition (Mileage or Misc Addition)
Click the Payroll Item button at the bottom of the list and
Click Edit Item
Type in a new name for the Item if appropriate – maybe something like Reimburse Program Supplies, click Next
Change the expense account from the default Salaries to the appropriate expense account (Ex. program supplies or mileage), click Next
Leave Tax Tracking set to None, click Next
Leave Tax Withholding set to No Tax Withholding, click Next
Next past the next three screens, (Calculate on Quantity, Gross v. Next and Default Rate and Limit), click FINISH
You may have to repeat this process a few times to set up the appropriate payroll items for the different expense accounts, (ex, Mileage, program supplies, office supplies, food…)
Once the items are established you will just select them as necessary and enter the reimbursement amounts when you process payroll.