Reimbursements and expenses (for admins)

Admins can set up reimbursements for employees and contractors in Gusto and run reports on expenses paid and reimbursed.

Important reminders

Reimbursements and expense reimbursements are not taxed, and therefore not reported as regular wages.
- Taxable fringe benefits (like reimbursement of a gym membership or cell phone plan) should also be added to payroll for tax reporting purposes.
Expense reimbursements for contractors are not supported.
Employees can learn how to submit reimbursement requests for expenses here.

Use the dropdowns below to learn more about a topic, or use CMD + F (or CTRL + F) to search for keywords throughout the article.

Give a one-time reimbursement

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

In addition to admins being able to add expenses, employees can submit them on their own for approval.

For US employees

Sign in to Gusto.
Click the Pay section and select Run payroll.
Click Run payroll if you'd like to pay them in their regular pay period, or click Off-cycle payroll to pay outside of the regular pay period.
Next to your employee, click +Reimbursement.
- If you're paying this in a regular payroll, click in to the Reimbursement column.
- If you'd like to give more than one employee the same one-time reimbursement, use the bulk edit tool.
Enter the dollar amount you'd like to reimburse.
Add a description (optional).
Click Save.
Finish running payroll.

For US contractors

Sign in to Gusto.
Click the Pay section and select Pay contractors.
In the "Pay domestic contractors" tile, click Create Payment.
Next to your contractor, click +Enter Payment.
Select +Reimbursement and enter the dollar amount you'd like to reimburse.
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.

Set up, edit, or delete a recurring reimbursement

Recurring reimbursements are added to the employee’s paycheck every pay period automatically, and are only paid on regular payrolls.

At this time, recurring reimbursements for contractors are not supported—follow the steps above to give a one-time reimbursement when paying your employees.

Set up a recurring reimbursement

Sign in to Gusto.
Click the People section and select Team members.
Click the employee's name.
From the Pay tab, find “Recurring reimbursements” and click Add.
Select a reimbursement type from the drop-down, or select Other reimbursement to create a new reimbursement type.
- If you selected "Other reimbursement," enter the reimbursement name.
  - Example: Office lunches
Enter the reimbursement amount that will be added on each regular payroll.
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 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

Sign in to Gusto.
Click the People section and select Team members.
Click the employee's name.
From the Pay tab, find “Recurring reimbursements” and click Edit next to the reimbursement you need to change.
- The following can be edited:
  - The reimbursement type
  - The reimbursement amount
  - The reimbursement name—this optional is only available if you selected "Other reimbursement" when setting up the reimbursement.
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

Sign in to Gusto.
Click the People section and select Team members.
Click the employee's name.
From the Pay tab, find “Recurring reimbursements” and click Edit next to the reimbursement you need to change.
Click Delete this reimbursement.

Reimburse your team for expenses (including mileage)

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 appear on regular, off-cycle, and bonus payrolls.
Managers can approve expenses—you'll just need to make sure they have the required permission to do so.
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.
Expense history is removed when you dismiss an employee.

Turn on the Expenses feature

Sign in to Gusto.
Click the Settings section.
Select the Customization tab.
Click edit next to "Expenses" and toggle to Enabled.
- This will only appear if you're on the Plus or Premium plan.
Click Save.

Submit a one-time expense for an employee

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

Sign in to Gusto.
Click the Expenses section.
Select an employee from the dropdown.
Enter a date for the expense.
Select the expense category.
Add a description.
Enter the dollar amount to be reimbursed.
Add a photo of the receipt or purchase confirmation being reimbursed in PDF, JPG, or PNG format (optional).
Click Save.

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 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, add a personal note on the paystub.

Reimburse your team for miles driven

Set up reimbursement rates

Sign in to Gusto.
Click the Expenses section.
Click Settings in the upper-right corner.
Select the Reimbursement rates tab.
Click Create new rate in the upper-right corner.
Enter a name for the rate and the dollar amount per mile to use.
- Refer to the IRS guidance to determine the appropriate rate to use.
Click Save.
Repeat the process to set additional rates if applicable.

Submit a one-time mileage reimbursement for an employee

Sign in to Gusto.
Click the Expenses section.
Select an employee from the dropdown.
Enter a date for the expense.
Select the Car and Mileage category.
Add a description.
Enter the mileage driven and select the reimbursement rate from the dropdown.
- The total dollar amount will be automatically calculated.
Attach images of the odometer in PDF, JPG, or PNG format (optional).
Click Save.

Edit, approve, reject, or delete an expense

Employees can learn how to submit reimbursement requests for expenses here—you’ll receive an email when an expense is submitted.

Sign in to Gusto.
Click the Expenses section.
From the Needs review tab, scroll to the expense you're looking for.
Under the "Actions" column on the far-right, click the three-dot action menu.
Select to:
- Edit (if available)
- Approve
  - Approved expenses will pay out on the next payroll, you’ll see the amount as a separate line item on the employee's paystub.
  - If you'd like to leave a note about the expense reimbursement for your employee, add a personal note on the paystub.
- Reject
  - Leave a note about why you're rejecting the expense and click Submit.
- Delete
  - This action cannot be undone—click Delete expense to confirm you want to delete it.

Customize your expense categories

Add custom expense categories

Sign in to Gusto.
Click the Expenses section.
Click Manage categories in the top-right corner.
Click +Add a new category.
Type in your new category in the popup screen.
Click Save.

Edit a previously created custom expense category

Sign in to Gusto.
Click the Expenses section.
Click Manage categories in the top-right corner.
In the list of "Custom categories", find the category you wish to edit.
Click the pencil icon.
Type in your new category name in the popup screen.
Click Save.

Delete a previously created custom expense category

Sign in to Gusto.
Click the Expenses section.
Click Manage categories.
In the list of "Custom categories", find the category you wish to remove.
Click the trash can icon.
Confirm your choice by clicking Delete.

Disable any expense category (custom or default)

Sign in to Gusto.
Click the Expenses section.
Click Manage categories.
Click the toggle in the "Active" column of the page to toggle active / inactive for a given category.

Filter your expenses

You can filter the list of expenses by category or by employee name.

Filter by categories

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

Sign in to Gusto.
Click the Expenses section.
Click on the filter button.
In the popup, select the categories you want to filter.
Click Apply.

Your list of expenses will now be filtered by the selected categories.

Filter by employee name

Sign in to Gusto.
Click the Expenses section.
Click in the Search people… text box.
Type in the partial name of the employee(s) you want to filter on.

Your list of expenses will now be filtered by the text.

Perform bulk actions when viewing expenses

You can perform bulk actions on a list of expenses. This works in a filtered or unfiltered list of expenses (see the Filter your expenses section of this article).

Select a group of expenses

Sign in to Gusto.
Click the Expenses section.
Select expenses in one of the following ways (clicking the Clear all link unselects all expenses).
- Click the checkbox of the expenses you'd 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.

Perform a bulk action

With your selected expense(s), click the Actions button on top to show the available 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
  - Unapprove: Provide a reason the expense is unapproved and move the expense to the needs review state.

Expense activity log

Sign in to Gusto.
Click the Expenses section.
Click View activity log in the upper-right corner of the page.

On this page, you can review all events related to reviewing expenses. In the “Details” column, click on the individual expense link to view that expense’s details.

In the "Changed by" column, there are three possible types of value to indicate who performed the action:

An individual affiliated to your organization
An automated process in the Gusto system
Someone from the Gusto Care team

These are the actions recorded in the "Action" column:

Created expenses
Approved expenses
Unapproved expenses
Rejected expenses
Edited expenses
Paid expenses

Housing allowances for ministers and clergy

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

Add the housing allowance amount as a recurring reimbursement. Under "Reimbursement," choose Minister housing allowance to characterize it properly.
- 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's excluded from taxable gross wages.
At the end of the year, any recurring reimbursements you've labeled as "Minister housing allowance" will automatically show up in box 14 of Form W-2.

Taxable housing allowance: Some states require withholding tax on pastor/minister housing allowance. At this time, Gusto does not support this.

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.

Apps that can help

Gusto connects to Aplos Accounting, which 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.