Reimburse employees' mileage and vehicle expenses in QuickBooks Online

Learn how to enter and give mileage reimbursements to your employees.

Employees should use company vehicles for business trips. If an employee used their personal car for business, you can reimburse them for the mileage. Here's how to track mileage reimbursements and pay employees for the expenses.

Note: Follow these steps if your employee paid for a company's vehicle expense out of pocket, like an oil change.

Step 1: Set up manual tracking for mileage reimbursements

If you haven't already, set up a supplier profile for your employee and a special expense account to track the reimbursements.

Set up a supplier profile for your employee

This supplier profile is separate from the regular employee profile used for payroll. Only use it to track reimbursements. Keep using employee profiles for everything else.

1. Go to Expenses (Take me there), then select Suppliers (Take me there).
2. Select New supplier.
3. Enter your employee's info.
4. Give your employee's supplier account a unique name in the Display name as field. Tip: Add "(Mileage)" to the end so you know which supplier profile to pick to track mileage.
5. Select Save.

Set up a mileage reimbursement expense account

1. Go to Settings ⚙ and select Chart of accounts.
2. Select New.
3. From the Account Type dropdown menu, select Expenses.
4. From the Detail Type dropdown menu, select one from Auto, Travel expenses - general and admin, or Travel expenses - selling expense.
5. Give the account a unique name that's easy to identify.
6. Select Save and Close.

Create an item for mileage reimbursement

Create a mileage item you can add to a bill. Use it each time to track this type of reimbursement.

1. Go to Settings ⚙ and select Products and services.
2. Select New, then select Non-stock.
3. Name the item "Manual mileage."
4. In the Description section, select I sell this product/service to my customers. Then enter a description.
5. In the Sales price/rate field, enter the cost you pay for travel per mile.
6. In the Purchasing information section, select I purchase this product/service from a supplier. Then enter a description.
7. From the Expense account ▼ dropdown menu, select the mileage expense account you just created.
8. Select Save and close.

Step 2: Create a bill for the mileage reimbursement

Create a bill anytime you need to reimburse an employee. Use the supplier profile, expense account, and mileage item you just created.

1. Select + New.
2. Select Bill.
3. From the Supplier ▼ dropdown menu, select the employee's supplier profile you created for mileage.
4. Select Item details to expand the section.
5. From the Product/Service dropdown menu, select the mileage item you created.
6. Enter or update the Description, Qty, Rate, and Amount as needed.
7. Select the applicable VAT.
8. Select the Billable checkbox if you need to make this a billable expense for a customer. Then select the Customer/Project from the dropdown menu.
9. Select Save and close.

Step 3: Reimburse your employee

After you pay back your employee, you can record the payment in QuickBooks:

1. Select + New.
2. Select Pay bills.
3. Select the Payment account and the employee to reimburse.
4. Select Save.

These reimbursements show up on your Profit and Loss report. At the end of the year, you can determine your deduction.

Next steps: See all of your mileage reimbursements

QuickBooks tracks these bills in your mileage expense account. You can go to Reports (Take me there), then run a Profit and Loss report. All of the expenses are listed in your mileage expenses account.

You can also go to your Chart of accounts and review your expense account history to see specific expenses you've reimbursed.