Reimbursement
In accounting, reimbursement means repaying an employee for a business cost they paid personally. Until paid it is owed to the employee, not to a vendor; whether it is tax-free depends on the employer's accountable plan.
Also called Employee reimbursement.
Authority: IRS Pub. 463 — reimbursements (opens in a new tab). Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- APExpense policy: who spends, who approves, what proofA one-page expense policy, an approval matrix that routes by amount and refuses self-approval, and the receipt rule, on Northwind's first October requests.9 min
- APCompany cards and reimbursements: coding, receipts and the statementHow a company card statement and an out-of-pocket expense report are booked, with a receipt for each, and why paying the statement is not a second expense.11 min
- APAccountable plans: when a reimbursement is not wagesThe three tests of an accountable plan, the 30/60/120-day safe harbor, and an unreturned travel advance, on Northwind's trade show trip.10 min
- APTravel, meals and mileage: what is reimbursable and what is deductibleHow to reimburse mileage at the rate in force on the trip date, what a per diem is, and how the meals, entertainment and gift rules cut the deduction.11 min
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Employee expense reimbursements and accountable plansHow to reimburse employees tax-free under an IRS accountable plan: business purpose, timely receipts, excess returned, mileage and sales tax on receipts.
- Form 941 and payroll tax deposits for startupsWhat Form 941 reports, monthly vs semiweekly deposits, the $100,000 next-day rule, FUTA, the R&D payroll credit, and what your provider can’t do.
- W-2 year end for startups: boxes, deadlines, correctionsThe W-2 boxes founders get wrong (box 1 vs 3 vs 5, box 12 codes), the W-3, the SSA deadline, state copies, and how to fix a mistake with a W-2c.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- payroll
- refund (money returned to a payer)
Nearby in the catalog
No component names this concept outright. These sit in the same part of the system.
Also in Payables
Defined in Lexicon. This page is generated from that document, so the two can't disagree.