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Intuit
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How to reimburse an employee

To properly reimburse employees for business expenses paid using their personal funds, you may:

  • Pay your employee now
  • Record the expense and pay your employee later

You are also able to see how much you owe your employee by running a Transaction Detail by Account report.

Note: Don't use these procedures if you want to pay an employee who is a subcontractor, or if you want this payment to appear on vendor reports. In those cases, set up the employee as a vendor, see Add a vendor, and then use a Bill and Pay Bills instead, see Enter and pay bills.

Pay the employee now

Follow these steps to pay the employee now:

  1. Select the Create  icon on the Toolbar, then select Check or Expense to record a payment to the employee, with attention to these fields:
    • Payee: Choose the employee.
    • Payment account: Choose the expense account appropriate for the purchase the employee made from the drop-down menu. Note: If you don't have one yet:
      1. Select + Add new.
      2. Name the account "Employee reimbursement."
      3. From the Account Type drop-down, choose Other Current Liabilities.
      4. From the Detail Type drop-down, choose Other Current Liabilities.
      5. Select Save and close.
    • Payment method: Choose a Payment method from the drop-down menu.
    • Amount: Enter the amount owed to your employee. (Break down the amount into different line items if tracking or making billable for multiple customers.)
    • Billable: (Optional) Check the box under Billable if you wish to offset the expense onto your customer's invoice.
    • Customer: (Optional) Select a customer from the drop-down menu if you are looking to track the expense for a specific customer or customers. (Note: The Customer and Billable fields are not available in QBO Simple Start, but in QuickBooks Online Plus and Advanced you may turn on the feature. See How do I turn on Billable Expenses?) 
  2. Select Save and close.

Record the expense for future payments

You can record the expense as a journal entry, and then pay the employee later after the end of the month or to coincide with the end of a pay period:

    1. Select the Create ⨁ icon.
    2. Under Other select Journal Entry to enter a transaction showing you owe the employee money.
    3. On the first distribution line, select the account used for tracking Employee reimbursement. If you don't have one yet:
      1. Select + Add new.
      2. Name the account "Employee reimbursement."
      3. From the Account Type drop-down, choose Other Current Liabilities.
      4. From the Detail Type drop-down, choose Other Current Liabilities.
      5. Select Save and close.
    4. On the second distribution line, enter:
      • Account: The expense account appropriate for the purchase the employee made.
      • DebitsAmount of purchase.
      • Name: If you want the expense associated with a customer, choose a customer. Otherwise, leave Name empty.
    5. Select Save.

Note:To set up multiple reimbursements according to expense type, see Create a reimbursement pay type.

Check how much you owe your employee

If you have not reimbursed your employee completely, you can check how much you owe an employee by running a Transaction Detail by Account report:

  1. Select Reports from the left menu and search for Transaction Detail by Account.
  2. Select Customize under the Toolbar.
  3. In the General section, verify the Transaction Date range includes the journal entries you've made above.
  4. In the Rows/Columns section, find the Group By field and select Employee.
  5. Select Change columns and then Select Employee.
  6. In the Filter section, look for Distribution Account field and select your Employee Reimbursement liability account from the drop-down arrow.
  7. In the Employee field, select the employee's name. (Note: If you want the report to show what you owe all employees, leave this set to All).
  8. Select Run report.

Now you're able to track and manage employee reimbursements.

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