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!
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.
Hello,
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?
Laura
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?
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