Thanks for reaching out to the Community about reimbursing an employee, I'll be happy to explain how to accomplish this.
You can set up single or multiple reimbursement pay types for an employee and give each a unique name. This is useful if you separately track reimbursements for different expense types such as travel and supplies.
The amounts paid as reimbursements are not subject to any taxes and are not included on any forms.
How to add the Reimbursement Pay Type in QuickBooks Online.
Select Workers from the left menu, then select Employees.
Select the employee's name.
Select edit(pencil) icon beside Pay.
Under How much do you pay, select Add additional pay types.
Select Even more ways to pay... drop-down, then select Reimbursement.
You may enter a recurring amount in the box, or add it when you run payroll.
You can also rename this pay type by selecting selecting the pencil icon beside Reimbursement.
If you want to set up multiple reimbursement pay types, just select Add Reimbursement type, then enter a reimbursement name and amount.
Once a reimbursement is added, you can also assign this to another employee. After assigning the reimbursement to the employee, check your accounting preference to ensure it is posted in the correct accounts for exporting purposes.
For more information on the Reimbursement Pay Type, click here.
Please remember, I'm always here for any other questions or concerns.
Just setting up a reimbursement does not address the "pretax" part of the original deduction. The employee's @w-2 will be wrong at the end of the year. How can we ensure that when we reimburse the employee, that their wages will be taxed correctly?