The expense reimbursement process enables an employer to pay funds back to an employee for business-related expenses they paid for with their own money. To begin, let’s examine the following question in more detail. How do accountable and non-accountable plans work?.Can expenses be reimbursed through payroll?.Are reimbursements taxable for the employee?.What kinds of expenses should businesses reimburse?.In this post, I’ll provide answers to the above, as well as other questions related to employee expense reimbursement, such as: ![]() For example, what are the rules governing reimbursable expenses? Do employees need to report reimbursements as income or wages? And just what is an “Accountable Plan,” anyway? Therefore, many employees have specific questions about how reimbursement works. A poorly-managed expense reporting system is frustrating for the employee, and the misclassification of expenses can wreak havoc on a company’s accounting.Įven worse still, incorrect reporting by the employer can sometimes cause the employee to overpay payroll withholding taxes. Nonetheless, reimbursement from your employer isn’t as easy as simply holding your hand out for some cash - and not understanding expense reimbursement can have negative impacts. Some states, like California and Illinois, even have mandates requiring companies to pay back their employees for reasonable expenses like these. ![]() Such reimbursable expenses are often incurred during travel, at business lunches, to purchase necessary tools and supplies, or when an employee must use a personal cell phone for a work-related call, among other examples. Sometimes, however, it falls to the employee to shoulder those work-related costs using their own money, with the promise that they will receive reimbursement.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |