Overview

Employees often incur out-of-pocket expenses, such as office supplies, transportation, or business meals and entertainment, in the course of doing business for an employer. Employers may wish to pay back employees for such expenses, and in some jurisdictions such as California, are actually required to do so.

Reimbursements for such expenses are treated as untaxed payments to the employee, separate from the employee's regular income. They are not reported as wages or income, but should be tracked for accounting purposes. The IRS has defined rules and limits for reimbursement amounts, reporting, and accounting that should be read and followed (see: Publication 463).

Defining reimbursements

Reimbursements can be defined in Check API on the reimbursements field on Payroll Items.

{
  ...
  "reimbursements": [
    {
      "amount": 50,
      "code": "Client Visit: Jan 12, 2024",
      "description": "Business Meal"
    },
    {
      "amount": 100,
      "code": "Client Visit: Jan 12, 2024",
      "description": "Train Ticket"
    } 
  ]
}

The description field allows you to provide a custom display name for a particular reimbursement, whereas the code field is used to link reimbursement amounts across multiple reimbursements and payrolls for the same employee.

For example, on paystubs, reimbursements on a payroll item are listed by description, and then their totals are shown by code. The above example will be displayed on a paystub as:

In addition to paystubs, reimbursements are displayed separately from earnings on payroll journal and summary reports.