Reimbursements and expenses

For employees

1. Click the Payroll section and select Run payroll.
2. Click Run Regular Payroll if you'd like to pay them in their regular pay period, click Off-cycle payroll to pay outside of the regular pay period.
3. Next to your employee, click +Reimbursement.
   • If you'd like to give more than one employee the same one-time reimbursement, you can use the bulk edit tool.
4. Enter the dollar amount you'd like to reimburse.
5. Finish running payroll.

For contractors

1. Click the Payroll section and select Pay contractors.
2. Click Create Payment. 
3. Next to your contractor, click +Enter Payment and then select +Reimbursement.
4. Enter the dollar amount you'd like to reimburse.
5. Finish running the payment.

Once processed, this amount will be seen as a separate line item on your employee's or contractor's paystub. If you'd like to leave a note about what the reimbursement, add a personal note on the paystub.

Note: If you have AutoPilot activated for your payroll, you’ll need to run payroll manually to add a one-time reimbursement and following the instructions above, OR approve all expenses before your Autopilot runs.

At this time, recurring reimbursements for contractors is not supported. You'll need to follow the steps to give a one-time reimbursement when paying your contractors.

Set up a recurring reimbursement

1. Click the People section and select Team members.
2. Click the employee's name.
3. Scroll to the bottom of the Job & Pay tab.
4. Click Add Recurring Reimbursement.
5. Select a reimbursement type from the drop-down, or select Other reimbursement to create a new reimbursement type.
6. If you selected "Other reimbursement," enter the reimbursement name.
   • Example: office lunches
7. Enter the reimbursement amount that will be added on each regular payroll. 
8. Click Save. 

The next time you run payroll, this amount will appear in the reimbursement field. You can edit the amount if needed before processing the payroll. 

Once processed, the amount will be seen as a separate line item on your employee's paystub. You can also run a payroll journal report to review totals for all of your recurring reimbursements.  

Edit a recurring reimbursement

1. Click the People section and select Team members.
2. Click the employee's name.
3. Scroll to the bottom of the Job & Pay tab.
4. Click edit next to the reimbursement you want to edit.
5. The following can be edited:
   
   • The reimbursement type
   • The reimbursement name
   • The reimbursement amount
6. Click Save.

The next time you run payroll, the update will appear in the reimbursement field. You can edit the amount if needed before processing the payroll. 

Once processed, the amount will be seen as a separate line item on your employee's paystub. You can also run a payroll journal report to review totals for all of your recurring reimbursements.  

Delete a recurring reimbursement

1. Click the People section and select Team members.
2. Click the employee's name.
3. Scroll to the bottom of the Job & Pay tab.
4. Click edit next to the reimbursement you wish to delete.
5. Click Delete this reimbursement.

Plus and Premium customers can reimburse employees for expenses using the Expenses feature. If you do not see this feature, you can upgrade your plan at any time or set up a one-time reimbursement.

Admins with the required permissions can add one-time expense reimbursements for employees, approve submitted expenses, or decline expense requests with a note.

Reminders

• Expense reimbursements will only appear on regular payrolls.
• Managers can not approve expenses.
• Expense reimbursements are not taxed, and therefore not reported as regular wages. If you’d like to set up a recurring expense reimbursement (rather than a one-time approval) follow these instructions.
• Reimbursements submitted through the Expenses feature are displayed in the reimbursement line in the Payroll Journal report.
  • On paystubs, the full title of the expense is included.

Enable Expenses

1. Sign in to your Gusto account.
2. Click the Settings section.
3. Select the Customization tab.
4. Click edit next to Expenses and toggle to Enabled.
   • This will only appear if you're on the Plus or Premium plan. 
5. Click Save.

Reimburse employees for a one-time expense

1. Go to the Payroll section and select Expenses.
2. Click the green + button on the right-hand side.
3. Select an employee from the dropdown.
   • Note: If you'd like to reimburse more than one employee the same for a one-time expense, you can use the bulk edit tool.
4. Add a photo of the receipt or purchase confirmation being reimbursed in PDF, JPG, or PNG format.
5. Enter a name for the expense, and the dollar amount to be reimbursed.
6. Click Submit expense.

Once submitted, all pending expenses (whether submitted by an employer or employee) will show up on your Expenses home page until approved. Approved expenses will pay out on the next regular next payroll, you’ll see the amount as a separate line item on your employee's paystub. If you'd like to leave a note about the expense reimbursement for your employee, you can add a personal note on the paystub.

Note: If you have AutoPilot activated for your payroll, you’ll need to run payroll manually to add a one-time reimbursement and following the instructions above, OR approve all expenses the day before your Autopilot runs. 

Customize Expense categories

To add custom expense categories, follow the steps below.

1. Go to the Payroll section and select Expenses.
2. Click Manage expense categories in the top right corner.
3. Click Add a new category.
4. Type in your new category in the popup screen.
5. Click Save.

To edit a previously created custom expense category, follow the steps below.

1. Go to the Payroll section and select Expenses.
2. Click Manage expense categories in the top right corner.
3. In the list of Custom categories, find the category you wish to edit.
4. Click the pencil icon.
5. Type in your new category name in the popup screen.
6. Click Save.

To delete a previously created custom expense category, follow the steps below.

1. Go to the Payroll section and select Expenses.
2. Click Manage expense categories.
3. In the list of Custom categories, find the category you wish to remove.
4. Click the trash can icon.
5. Confirm your choice by clicking Delete.

To disable any expense category (custom or default), follow the steps below.

1. Go to the Payroll section and select Expenses.
2. Click Manage expense categories.
3. Click the toggle in the Active column of the page to toggle active / inactive for a given category.

Filtering Expenses

Now you can filter your list of expenses by employee name and/or categories.

Filtering by category

On the expenses page, you can now filter expenses by custom and/or default categories. To filter by categories, follow these steps:

1. Go to the Payroll section and select Expenses.
2. Click on the filter button.
3. In the popup, select the categories you want to filter.
4. Click Apply filters.
5. Your list of expenses will now be filtered by the selected categories.

Filtering by Employee

1. Go to the Payroll section and select Expenses.
2. Click on the Search people… text box.
3. Type in the partial name of the employee(s) you want to filter on.
4. Your list of expenses will now be filtered by the text.

Bulk Actions

You can perform bulk actions on a list of expenses. This works in a filtered or unfiltered list of expenses (see Filtering Expenses on how to filter).

Selecting a group of expenses

1. Go to the Payroll section and select Expenses.
2. Select expenses in one of the following ways (clicking the Clear all link unselects all expenses).
   • Click the checkbox of the expenses you would like to perform a bulk action on.
   • Click the top level check box to select all on the current page.
   • Click the Select all link to select all expenses, including those not on the current page.

Performing a bulk action

1. With your selected expense(s), click the Actions button on top to reveal the bulk actions. Based on the status of the selected expenses, different bulk actions are available.
   • Needs Review
     • Approve: approve expenses to be reimbursed during the next payroll
     • Reject: provide a rejection reason and reject expenses
     • Edit: update the category and/or description of expenses
     • Delete: permanently delete the expense
   • Approved
     • Unapproved: provide a reason the expense is unapproved and move the expense to the needs review state.

Ministers may be given an official housing allowance that is excluded from taxable gross wages. Here's how to set up a housing allowance in Gusto:

1.  Add the housing allowance amount as a recurring reimbursement. Under "Reimbursement," make sure you choose Minister housing allowance to properly characterize it. 
   • To create end-of-year federal filings, ministers and clergy must also have taxable wages in addition to any housing allowances issued.
   • Make sure the allowance is an official housing allowance that is excluded from taxable gross wages. 
2. At the end of the year, any recurring reimbursements you've labeled as "Minister housing allowance" will automatically show up in box 14 of the W-2 form. You can correct and override any amounts on the end-of-year checklist.

Tax exemptions for ministers and clergy

Ministers may be exempt from certain taxes such as Social Security and Medicare—refer to the Topic 417 - Earnings for Clergy for more details on how to request these tax exemptions with the IRS.

Once you've confirmed that the minister is exempt from these taxes, set up the tax exemption in Gusto in the People section.

Apps that can help

Gusto connects to Aplos Accounting and can automatically track your payroll and tax payments. We also support the W-2 requirements and unique church payroll needs for pastor housing allowances and tax exemptions.