Keeping Mileage Expense Out of Payroll
Here’s a tip we found on addressing a specific need for a customer, but it can apply across quite a number of various industries, so we thought it good information to share.
If you need to pay staff for mileage on a payroll check AND bill a client for that mileage here’s what to do.
When creating a QB paycheck, choose the customer name to be billed for the mileage under Customer Name. When you create an invoice for that customer, fill in the Customer Name at the top of the invoice form, then click Time and Costs. Then click the Time tab and you should see the mileage that was paid to your employee. Choose that and it will show as an item on the invoice.
Set up the mileage reimbursement item as an Addition. Also, very important, all Addition and Company Contribution items must have the Track Expenses by Job option clicked (you can edit the item to check this box).
When you are creating the paycheck, in the Other Payroll Items box, choose the Mileage Reimbursement you have set up. Enter the rate and the number of miles. This amount will calculate and be added as an after tax item to the employee’s paycheck. Most importantly, the customer name needs to be chosen in the Earnings section.
Below is copied from QuickBooks Help: You can keep track of payroll expenses by:
- Customer and job
- Service item
- Expenses you can break down include:
- Salary and hourly wages
- Company-paid payroll taxes
- Additions, commissions, and company contributions
QuickBooks can prorate an employee’s company-paid expenses in the same proportions as it prorates the dollar amounts of the employee’s earnings. You can also set up QuickBooks to prorate each addition, commission, or company contribution.
Keeping track of payroll expenses by customer and job:
This feature is available only in the Pro, Premier, and Enterprise Solutions editions.
- Turn on the payroll preference for reporting payroll taxes by Customer:Job.
- On every payroll item for an addition or company contribution, select the Track Expenses by Job checkbox.
- On each paycheck you write, associate every salary or hourly wage with the correct job or jobs.
- Alternatively, if you use timesheets to enter hours, associate every hourly wage with the correct job or jobs.