Employee Mileage Reimbursements

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Setting up and paying mileage reimbursements to employees in Small Business Manager.


To reimburse employees for mileage, a new pay code should be setup using the Business Expense pay type.

The following steps outline how to setup a new pay code for mileage:

1. Create a new pay code by going to Setup | Payroll | Pay Code. This will open the Payroll Pay Code Setup Wizard.

2. Click the Add button.

3. Select Business Expense for the Pay Type field.

4. Enter a Pay Code and Description to identify this pay code.

5. Click Next, and select the taxes this pay code should be subject to as required by your tax jurisdiction. You may also enter a flat Federal and State tax percentage.

6. Click Next, and select whether or not to accrue vacation and sick type for this pay code. Typically, both of these options would be set to No for a Business Expense pay code.

7. Click Next, and enter the appropriate W-2 information for this pay code.

8. Click Next, and enter a posting account for this pay code.

9. Click Add to create the new pay code.

After creating the new pay code for mileage reimbursements, the new pay code must be assigned to individualemployees as necessary. The following steps outline how to assignthe new pay code to individual employees:

1. Go to Payroll | Employee | Codes.

2. Select the employee you wish to add the mileage pay code to.

3.Click the Add button and choose Pay Codes.

4. Click the Pay Code drop-down list and select the pay code you setup for mileage as identified in step 4 above.

5. Enter the Pay Rate for which you reimburse mileage. Or you may enter the total reimbursement amount if you regularly reimburse the same amount to this employee. Note - This pay rate is informational only and will not be used to calculate a mileage reimbursement amount. The rate you enter here will default in the Payroll Transaction Entry window.

6. Click the Add button to create the pay code record for this employee.

7. Repeat steps 2-6 for each employee you wish to add the mileage pay code.

After the pay code has been setup and added to an employee record, a transaction must be entered to reimburse an employee for mileage. The following steps outline entering a mileage reimbursement transaction:

1.Open the Payroll Transaction Entry window by going to Payroll | Transactions.

2. Enter the pay period beginning and ending dates.

3. Enter or select an employee ID.

4. Enter or select the mileage pay code.

5. In the Amount column, enter the total dollar amount you are reimbursing.

Note - You must manually calculate the reimbursement amount and enter it into the Amount column. The system does not calculate this amount for you.

6. Close the Payroll Transaction Entry window.

7. Next, create a check run by going to Payroll | Create Checks. Create this pay run as you normally would and you should see the mileage reimbursement transaction you just entered.

This article was TechKnowledge Document ID:29652