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N. Expense payments on behalf of employee

Paying expenses on behalf of employees2:54
Paying expenses on behalf of employees
1 videos, with a playing time of 2 minutes


Paying expenses on behalf of employees2:55

"If a company pays an employee's personal expenses, how's it recorded?"

When the company pays for an employee's personal expenses, it needs to be recorded as a: "Benefit-in-kind"

To record a company paying for an employee's personal expenses as a "Benefit-in-kind":

  1. First, tap: MenuExpense claim
  2. Select the person who the company's paying the personal expenses for.
  3. Next, tap: Benefit-in-kind
  4. If you've got an image, like a receipt, that you'd like to include, you can upload, or take a photo of it.
  5. Then tap: Next
  6. Type in the value of the personal expenses the company's paying.
  7. Next, change "Arranged by" to: "Employee"
  8. Optionally, if there's a co-pay, or a yearly amount that the person's agreed can be taken off their pay, enter that also in: Employee deducted co-pay
  9. Then tap: Next
  10. Optionally, type in a short description about the personal expense, and tap: Next
  11. And because it's a payroll admin who's entering it, the expense is automatically approved.
  12. Now, to see how it shows up on the person's paystub, scroll down and tap: See on paystub
  13. And when you hover your mouse over the "Benefit-in-kind" amount, you'll see the details.
  14. There may have been a co-pay, or an amount that the person's agreed can be taken off their pay. If so, you'll also see that amount showing as "Employee deducted co-pay" with its own notes when you hover.
  15. And finally, you'll know that the personal expense's value is being correctly recorded and taxed.

Keep in mind that:

  • The co-pay amount is automatically set to be deducted from the person's pay.
  • The company doesn't have to separately collect the co-pay amount from the person.
  • Also, in some cases, the employee has themselves paid for the personal expense cost, and is asking the company for a once-only reimbursement.
  • To add a "Once only taxable benefit" reimbursement, tap: MenuExpense claim, select the person, and tap: Once only taxable benefit
  • Also, if the personal expense payment is repeating every week, month, or every payday, set it up as a repeating: "Benefit-in-kind"

To learn more:

And that's it! That's everything you need to know about paying for an employee's personal expenses!

Updated: Mon, Nov 6, 2023.

© 2020–2024 1st Money UK Holdings Ltd. All rights reserved.