The easiest way to pay a one-time reimbursement is through a negative deduction, which is a modified, post-tax deduction that unlike a typical deduction, adds an amount to an employee's pay instead of deducting it. While other methods exist for paying a reimbursement, a negative deduction can be manually added during payroll to any employee's check, which makes reimbursement simple. Here's how to make a negative deduction (and how to actually apply it during payroll):
- Log onto your Fingercheck account and go to the "Setup" tab. From the drop down menu on the top left of the page, select "Payroll Menu."
- Within the "Payroll Menu," go to "Deductions" and click on the yellow "Add" button to add a new deduction.
- Let's assign the Code "REIMB" and enter "Reimbursement" for the Short Description. You can name the "Description" anything you want -- we'll just copy our Short Description. By "Tax Type," select O-Post Tax, and by "Frequency," select Weekly. Then click "Save."
- Now you have created your deduction! The next step is to learn how to add this deduction to payroll in order to reimburse your employee. Let's run payroll.
- Within Step 4, "Payroll Entry," click on the ^ next to the employee's name you would like to reimburse and click on "Edit Check."
- In order to enter values into the editable fields, click on the "+" sign next to "Deductions." Once you've done that, it's time to enter the deduction type and cost. By "Deduction," select "Reimbursement" from the drop down menu, and by "Amount," enter the negative cost of the reimbursement. For instance, to pay $100, enter -100.00. This way, the deduction will pay the amount instead of deducting it. Then click "Save."
- Once you click "Continue," the Preview Payroll grid will display the negative deduction you entered. Since you selected "Post-Tax," the employee will receive the full amount they are owed in order to be completely reimbursed. Just click "Next" to approve payroll and the employee will be paid.
To learn more about our cost effective and user-friendly cloud-based time and attendance software, check out our website at Fingercheck.com. Interested in our services? Sign up for a 30-day free trial and get started with Fingercheck today.