Hello there, @Krisabitz.
I can provide some information about tracking per diem in QuickBooks Online (QBO).
When we talk about Per diem, these are payments not considered as wages and therefore non-taxable. However, your payments will be taxable if the following apply to you:
- Payment is more than the allowable federal per diem rate
- You did not file an expense report with your employer
- Your expense report did not include the date, time, place, amount, and business purpose of the expense
- Your employer gave you a per diem and didn't require an expense report.
If the above information is met, per diem is subject to income tax withholding and payroll taxes. But, if not, recording per diem in QBO is an easy process. You need to create a payroll item and then add the amount to the paycheck.
Here's how:
- In the left menu, click Payroll.
- Go to the Employees tab.
- On the Employees page, select the worker you're working on to open its profile.
- Click the Pencil icon for Pay under Employee details.
- Click the Add additional pay types link under the How much do you pay this employee section.
- Locate and select the Nontaxable Per Diem Recurring amount.
- Click on Save, then Done.
Once done, the pay type created will show on the Enter Employee Pay Details page. From there, type in the correct amount.
To learn which pay type to choose, visit this article: Add or change pay types. It contains descriptions of the pay types and how it impacts federal taxes and forms.
You can also read this resource that provides detailed information about recording non-taxable payments in QBO: Reimburse an employee.
For future help, you can run payroll reports to get a closer look at your business finances.
Let me know if you have other questions about payroll. I'll be around to assist you in case you need it. Have a great day.
