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Reimbursement to Employee

I’ve been through multiple postings regarding reimbursement to an employee through QB but can’t find one that does not assume I am using QB Payroll service where it it possible to create a “non-taxable” and “non-reportable” outlay of money to the employee.   What’s the best solution when we are using a different payroll solution?  

should I simply create the employee as a non-


Reimbursement to Employee

Good day, @unpluggedpub1-gm,


I can guide you through the steps on how to record the reimbursement if you have another payroll provider.


There are two ways to record the return of funds to the employee. This is by writing a regular check or enabling manual payroll and creating a paycheck for the refund.


For the first option, simply go to the Banking menu and choosing Write Checks. Then, fill out all the information of the refund to post it to the register.


For the second option, follow the steps I've outlined below.


Step 1: Set up your company preferences for payroll:

  1. Click Edit at the top, and then select Preferences.
  2. On the left panel, select Payroll & Employees then go to the Company Preferencestab.
  3. In the QuickBooks Desktop Payroll Features section, select the Full Payroll radio button.
  4. Select OK

Step 2: Enable Manual payroll:

  1. Click Help at the top, and then select QuickBooks Help (or press F1 on your keyboard).
  2. On the Search field, type Set my company file to use manual calculation and press Enter on your keyboard.
  3. Select the link that shows Set your company file to use manual calculations.
  4. Scroll down and click the link for Set your company file to use the manual payroll calculations.
  5. When your company file is set up for manual payroll computation, QuickBooks inserts a zero amount for each payroll item associated with a tax.

See this link to get the payroll information and taxes set up in the system: Get started with Payroll


Once set up, create a paycheck for the employee by going to Employees menu and selecting Pay Employees. Follow the rest of the steps below:


  1. Click the Employee name then press Open Paycheck Detail at the top.
  2. Next, go to the Other Payroll Items and click the first line to reveal the drop-down arrow.
  3. Click the drop-down and press Add new.
  4. On the next page, choose Addition the press Next.
  5. Enter the name of the item, like "Employee Reimbursement".
  6. Choose an expense account to where you want to post the outflow of funds.
  7. Press Next until you see the Default rate and limit window.
  8. You can leave the rate as 0.00 so you can use it for other employees, or set a fixed rate for reimbursements.
  9. Once done press Finish.
  10. If you set 0.00 as the rate, manually type the reimbursable amount in the Rate column.
  11. Since you have manual payroll, all taxes will not show any amounts. You can manually add in the data if this reimbursement is taxable.
  12. Once you're done press Save & Close then Continue.
  13. Lastly press Create Paychecks.
  14. Now this entry will post under the employee's profile.


Let me know if there's anything you need help with. I'll be right here to help you. Have a nice day!

Community Champion

Reimbursement to Employee

The best practice is to have the employee submit an expense report and then cut them a standard bank check for the item(s) on the expense report.

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