Setup a Per Diem Payroll Item in QuickBooks Desktop

In this article learn why you need to “setup per diem payroll items in QuickBooks” and how to set up Per Diem Payroll items on QuickBooks Desktop.

Per diem payments is a type of daily allowance that is paid to employees to take care of the costs which were incurred during a business trip. Business expenses generally comprise transportation, accommodation, and food, along with other incidental expenses, etc. In other words, per diem is a structural compensation system where an employee is compensated on a per-day basis, as opposed to per hour/month option.

Thus, when a per diem payroll item is created in QuickBooks, it helps businesses by:

• Covering work-related expenses
• Promoting professional development
• Providing incentives

How to Setup a Per Diem Payroll Item in QuickBooks

In order to register a per diem payment, it is imperative to create a payroll item and then add the particular amount to the paycheck.

Step 1: Click on Workers Menu

• Click the Workers menu in your QuickBooks account and select the Employees option.

Step 2: Specific the Worker

• On the particular Employees page, choose the specific worker to click open the profile.

Step 3: Select the Pay Under Employee

• Select the pencil icon and choose the Pay under employee details option.

Step 4: Select Additional Pay Types

• Select the additional pay types to link in the How much do you pay this employee section.

Step 5: Enter the Amount in the Recurring Amount Section

• Then select the Reimbursement and then enter the amount in the Recurring amount section. Then Click Done.

How to Set up Bonus Payroll Item in QuickBooks

In case you are not looking to create a new item then follow these steps to configure a (payroll) item for a bonus.

• Go to the QuickBooks menu and click on the list tab.
• Choose Payroll from the list of options provided.
• Scroll down to find the payroll item button. This can be located on the bottom left of your screen.
• Choose to click on the “New” tab.
• Choose Custom Setup and then click Next.
• Select wage options and again click Next.
• Select Bonus, enter the name of the employee’s click Next.
• Locate the expense account you want an item to be tracked.
• Once done, click on the finish button and your configuration for a payroll item for bonuses will be all set.

Why do you need to Set up Per Diem Payroll items in QuickBooks?

Per diem payments play a very vital role when it is required to rack up yearly business expenses like meals, accommodations, travel, etc. Also, companies offer per diems in the form of partial expense coverage, company credit cards, fixed daily rates, etc., since they prove to be very useful for specific job profiles that call for extensive traveling.

Such employees are generally hired either on temporary or short-term contracts in comparison to full-time opportunities. The finest examples of employees on the per diem payment schedule are substitute teachers and healthcare workers.

Types of Per diem Payments

There are two types of per diem payments:

Fixed-Rate: Any business that integrates a fixed per diem method of payment for its annual expenses generally pays the employee a fixed amount of money per day.

Out-of-Pocket Expenses: In certain cases, where employees are needed to pay for their expenses straight and without any aid, companies usually ask them to submit all their authentic claims. If the claims are sanctioned for out-of-pocket expenses, companies allow reimbursement of the said business expense.

The good thing about per diems is that they are not at all taxable. They are only taxable when a specific employee fails to provide any information related to an expense report.