QuickBooks Team
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Re: Negative taxes on employee paycheck

Hello @Kroeh,


You don't need to enter a negative amount for your paycheck.


It isn't necessary to input negative amounts as QuickBooks recognizes them as deductions, but I have a solution for you. You can override the amounts in your paychecks.


Here's how you can edit the amounts:

  1. Click on Employees from the menu bar.
  2. Select Pay Employees.
  3. Continue to run payroll.
  4. Click on the Pencil icon to edit paycheck.
  5. Click on Save & Close.

You can also create a non-taxable reimbursement payroll item. First, you'll need to add a new payroll item. You may follow these steps:

  1. Click on Lists from the menu bar, and choose Payroll Item List.
  2. Click on the Payroll Item button, choose New.
  3. Select the Custom setup button, then click on Next.
  4. Click on the Addition item type, then select Next.

Next, you need to set up the item. Here's how:

  1. Select an expense account to track travel or mileage amounts. Or if this will be an advance to the employee, choose an asset account.
  2. Set the Tax Tracking type to None so that the amounts do not report on tax forms.
  3. Click on Next.
  4. For amounts paid per mile/kilometer, select the Based on Quantity checkbox. Then select Next.
  5. Choose to calculate on net pay. Then select Next.
  6. Enter a Default Rate. Then select Finish.

Once completed, you can now add the item to your employee's record. Here's how:

  1. Click on Employees from the menu bar.
  2. Select Employee Center.
  3. Double-click the employee's name.
  4. Go to the Payroll Info tab.
  5. Add the item from the drop-down list under Additions, Deductions, and Company Contributions.

That's it! You can now successfully enter the reimbursement to your payroll. Please let me know if you have other questions.