PAYSTUBS DO NOT LIST REIMBURSEMENTS

[MountainHouse]

The paystub function in payroll reports does not work properly. The stub does not list reimbursements, and by excluding the reimbursements the YTD net pay is incorrect, because it deducts the taxes, but does not show the additions of reimbursements , so the bottom line number is mathematically incorrect. The larger issue is that the reimbursements in particular for mileage need to be listed, as a employee qualifying for a loan or other financial situation does in fact get to count mileage reimbursements as income. Please inform the proper engineers. @_Violet 

[TheRealChipA]

Hey @MountainHouse. According to the Square Help document on reimbursements, all reimbursements are NOT consider income, period.  This is because we, as employers, are just reimbursing employees for out-of-pocket expenses that they incurred on our behalf.  According to IRS documents on income and deductions, mileage reimbursements are actually considered tax deductions to employees, up to the current federal mileage rate for the tax year in questions.  The only time that mileage reimbursements are considered income for any purpose is IF you are reimbursing more than the federal guidelines allow.

I emailed my accountant/CPA about this after reading your post.  He reminded me that we actually do NOT want reimbursements to be considered income because if they are then we have to pay employer taxes on them.  Most of us would be very upset if we had to do this for something that is not considered income by the IRS.

Anyway, if you really want to pay employer taxes on reimbursements, there is a work-around.  When you run your payroll, don’t put the amount in the Reimbursements column/field.  Rather, put it in the Additional Pay field.  Just remember that your employee will now have to pay payroll taxes — including social security, Medicare, state taxes, etc — on their reimbursements, which means that they won’t get their full reimbursement anymore.  Also, remember that you will be paying more in employer taxes for this thing you are considering “income.”  This is exactly in accordance with current laws — both federal and state.  Still, the option is yours.

[MountainHouse]

Thanks for sharing... I have in fact personally had my mileage be counted as income on a loan. But, even if for general purposes as you described, the bottom line total on the stub is not correct, because it is in fact adding the reimbursements to the YTD net pay, although there is no detail of what the reimbursements are.