The first step to getting your employees reimbursed is setting up a new line item in your payroll system; specifically, one that is non-taxable (or 'tax-free'). PeopleKeep is better than wages - reimbursements verified through PeopleKeep aren't subject to payroll taxes and don't increase an employee’s taxable salary on their W-2.
The payroll line item can be described as follows:
- A reimbursement, similar to mileage and travel expense reimbursements
- Non-coded, miscellaneous
- Addition to net income
- No tax tracking
While we’re experts on personalized benefits and PeopleKeep, your payroll software company will be the experts on how to use their software. We recommend reaching out to your provider with questions on adding a tax-free reimbursement line item.
Here are help articles from a couple common payroll providers:
QuickBooks both online and Intuit