How to Set Up a Per Diem Payroll Item on QuickBooks Desktop?

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Set Up a Per Diem Payroll Item on QuickBooks Desktop

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

Per diem payments is a type of daily allowance that are paid to employees to take care of the costs which were incurred during a business trip.

Business expenses generally comprise transportation, accommodation, 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 business by:

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

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.

How to Set up 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.

Total Time: 25 minutes

1. Click on Workers Menu

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

2. Specific the Worker

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

3. Select the Pay Under Employee

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

4. Select Additional Pay Types

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

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.

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.

Setting up a per diem payroll item in QuickBooks has its own set of benefits. However, if think you cannot follow the above-mentioned instructions properly to set up a per diem payroll, hire the services of a professional.

For any kind of technical assistance on per diem payroll in QuickBooks, kindly call QuickBooks ProAdvisor Support.


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