Reimbursement being included in 401k deduction

  • 17 October 2023
  • 4 replies

Userlevel 2

How do you suggest is the best way to handle Reimbursements on a paycheck so the per diem does not get taxed or included in 401k%?  We have reimbursements and per diem that need to be on the paychecks but not subject to taxes and/or 401k % deduction.


Thanks in advance!


Best answer by tsnyder16 17 October 2023, 23:39

View original

4 replies

Userlevel 4
Badge +1

My suggestion would be to make them a payable benefit using the Deductions and Benefits screen.  It is possible to tell the system not to tax an earning code, however, I am not sure that it can be excluded from the 401K calc. so a payable benefit would be best.

Badge +18


I’ve been reading the Payroll help, and it seems like the Per Diem earning type should be modified in Earning Type Code screen, where Subject to Taxes field should not be set to ‘Tax Engine’ for Per Diem earnings. Subject to Taxes should be set to None, or None but Listed Below, to avoid taxing expense reimbursements.

I’m not sure if 401k deduction is excluded when we say ‘None’ - unclear if Subject to Taxes really means ’Subject to taxes and other deductions.’ 

Do you have a test environment where you can try the changes and see results before making the changes on real payroll?


Userlevel 7
Badge +6

@WoodyGilbert i agree with @Tsydnor i set up per diem and reimbursements as payable benefits on the paycheck and you’ll want to make sure to uncheck the “affect tax calculation” so it doesn’t get taxed.

How does the employee enter the amt of per diem(i.e., number of days) on their timecard if it is set up as a benefit?


About Acumatica ERP system
Acumatica Cloud ERP provides the best business management solution for transforming your company to thrive in the new digital economy. Built on a future-proof platform with open architecture for rapid integrations, scalability, and ease of use, Acumatica delivers unparalleled value to small and midmarket organizations. Connected Business. Delivered.
© 2008 — 2024  Acumatica, Inc. All rights reserved