Paying Expenses on Employee Paychecks with Payroll

If you use SuitePeople U.S. Payroll, you can choose to pay employees’ expenses on their regular paychecks instead of paying them through accounts payable. When you use SuitePeople U.S. Payroll to pay expenses, you pay the full amount of the expense report. You can partially pay an expense report, or pay an expense report on a date other than the regular pay date. To do this, pay expenses by accounts payable. To pay expenses by accounts payable, go to Transactions > Pay Bills.

To pay expenses on employee paychecks, complete the following tasks:

  1. Setting the Pay Expenses on Paychecks Preference

  2. Creating an Earning:Expense Payroll Item

  3. Adding an Expense Payroll Item to an Employee Record

  4. Updating Payroll Information

  5. Creating a Payroll Batch that Uses the Pay Expenses Option

Note:

When you pay expenses on employee paychecks, note the following. In the general ledger, the default payable account for expense reports is debited, and the payroll funding account is credited. For more information about default payable accounts, see Setting Default Payable Accounts for non-OneWorld Account.

Setting the Pay Expenses on Paychecks Preference

To set the Pay Expenses On Paychecks preference:

  1. Go to Setup > Payroll > Set Up Payroll.

  2. Check the Pay Expenses on Paychecks box.

  3. Click Save.

After you enable the preference, you need to create a new payroll item.

Creating an Earning:Expense Payroll Item

To create or edit an Earning:Expense payroll item:

  1. Go to Lists > Employees > Payroll Items.

    • To create a new payroll item, click New.

    • To edit an existing payroll item, click Edit next to the payroll item you want to edit.

  2. If you have a NetSuite OneWorld account, select a subsidiary from the Subsidiary list.

  3. From the Item Type list, select Earning:Expense.

  4. In the Item Name field, enter a name for the earning item.

  5. From the Expense Account list, choose any expense account. The expense account that you choose here does not determine the expense account that is debited for the reimbursement.

  6. From the Pay Code list, select Nontaxable Reimbursement.

  7. If necessary, select a Report Section.

  8. Click Save.

Earning:Expense items do not affect an employee's gross pay. They are added to the net pay. In addition, expense items do not appear on the employee's W-2.

Next, you need to add the expense payroll item to the employee record.

Adding an Expense Payroll Item to an Employee Record

To add an expense payroll item to an employee record:

  1. Go to Lists > Employees > Employees.

  2. Click Edit next to the employee name.

  3. On the employee record click the Payroll subtab.

  4. Click the Earnings subtab.

  5. From the Earnings list, select the expense payroll item.

  6. Click Add.

  7. Click Save.

Add the expense payroll item to all employee records. For more information, see Including an Employee in Payroll.

When an employee submits an expense report and it is approved, you can now pay the expense report when you process payroll.

Updating Payroll Information

After you create the Earning:Expense payroll item and add the item to employee records, you must update payroll information. For more information, see Updating Payroll Information.

Creating a Payroll Batch that Uses the Pay Expenses Option

After you complete the tasks above, you can pay the expense in a payroll batch.

To pay expenses on checks in a payroll batch:

  1. Go to Transactions > Employees > Create Payroll.

  2. Create the payroll batch. For more information, see Creating a Payroll Batch.

  3. On the Payroll Run page, verify that the Pay Expenses box is checked.

  4. Verify that the employees you want to pay are included in the payroll.

  5. Click Calculate.

  6. When the calculation is complete, on the Complete subtab, click View next to a paycheck.

  7. Click the Expenses subtab.

  8. Verify that the expense appears on the paycheck.

After you have verified the information for the payroll batch, you can commit it. For more information, see Committing a Payroll Batch.

Related Topics

Expense Reports
Employee Access to Expense Reporting
Enter an Expense Report
Approving an Expense Report
Editing an Expense Report From the Expense Reports List
Deleting an Expense Report From the Expense Reports List
Rejecting an Expense Report From the Expense Reports List
Corporate Card Expenses
Reviewing Expense Reports
Giving Accounting Approval for Expense Reports
Giving an Employee Access to Purchase Requests
Notifying a Supervisor or Approver About Required Approvals
Expense Reporting

General Notices