Reimbursement of business expenses

cutesmart

Reimbursement of the expenses for business purpose should be made to employee tax free. That is what is mentioned in IPASS book.

But in real life, how to realize this kind of tax free reimbursement payment in payroll software?

I assume, enter the amount of business expenses.
For example "a lunch at business trip in Belfast, 50 euros";
So we need enter "50" in the relevant expense category in payroll software, and tick a box (maybe there is a box or some selection options?) of "tax free"?

And the figure showing on employee's payslip under "expenses" would not be 50, but would be a larger amount of grossed up amount?

Thanks a mill!

Calahonda52

cutesmart wrote: »

Reimbursement of the expenses for business purpose should be made to employee tax free. That is what is mentioned in IPASS book.

But in real life, how to realize this kind of tax free reimbursement payment in payroll software?

I assume, enter the amount of business expenses.
For example "a lunch at business trip in Belfast, 50 euros";
So we need enter "50" in the relevant expense category in payroll software, and tick a box (maybe there is a box or some selection options?) of "tax free"?

And the figure showing on employee's payslip under "expenses" would not be 50, but would be a larger amount of grossed up amount?

Thanks a mill!

At this stage perhaps you might post a link to this IPASS book, since it features in all your recent posts in here.

It looks like a series of exam questions: is it the Junior Cert business paper.

As for your query: business expense in Belfast will be sterling, so you need to deal with the FX aspect as well.

The business expense reimbursement will not be grossed up in the employees payroll.
Why would it if it is flagged tax free earlier.?

In my job and any previous ones expenses are not repaid through payroll and have nothing to do with my pay slip, expenses have nothing to do with your salary so why would it go through payroll.. They are simply reimbursed into my bank account separately, in my current job I get reimbursed the following day multiple times per month if necessary after I submit an expanse claim no way would I wait until the end of the month to get it with my salary as I could have hundreds owed to me from separate claims etc.

CIARAN_BOYLE

Calahonda52 wrote: »

At this stage perhaps you might post a link to this IPASS book, since it features in all your recent posts in here.

It looks like a series of exam questions: is it the Junior Cert business paper.

Irish payroll association.

I was reading it as someone who did their certificate course then trying to adjust to the real world and doing payroll in the real world for the first time.

y0ssar1an22

non taxable additions on your payroll software

Sonny noggs

I have never seen expenses processed through payroll in any job I have had, all have involved international travel, so some months expenses are in the thousands.

Synode

Sonny noggs wrote: »

I have never seen expenses processed through payroll in any job I have had, all have involved international travel, so some months expenses are in the thousands.

It does happen though. A lot.

y0ssar1an22

also be sure if you are not keeping receipts to use revenue's approved rates:

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

cutesmart

Wao, lots of help here!
I appreciate so much! Thanks again everyone!

namenotavailablE

Make sure that you set the expense item as 'not subject to USC', 'not subject to PRSI' as well as 'not subject to PAYE' in your software's settings.

mogilvie

The answer of course depends on what payroll and accounting package you are using.

Expenses should be reimbursed for the amount the employee actually paid out.

For items like personal mileage there are rules around the use of direct expenses, or distance rates, or allowances. IPASS is very comprehensive.

If you are reimbursing through your payroll, then that normally only covers the money going back to the employee for goods and services purchased on behalf of your company. You accountants team should be provided with relevant VAT receipts so that the company can then claim the vat back on applicable purchases. This is normally done via your accounting processes.

For that reason, many companies reimburse expenses separately instead of through payroll. It's not really a payroll/PAYE function. However, doing it through payroll does provide a good employee record, and can allow you to wrap expenses and payroll into one sepa/bankfile transaction. If you are doing it via payroll, then you wouldn't need to itemise each individual transaction, just group them as one claim reimbursement.

Mark Ogilvie
Parolla Payroll