Square Payroll: Is 'Additional Pay' taxed? How do I reimburse a team member for business expenses?

[lickskillet]

The title of this thread has been edited from the original: Additional Pay

Is "additional pay" taxed on payroll? Or can it be used as a reimbursement for business expenditures. 

[Helen · Accepted solution]

Hello @lickskillet, great question! 

Yes, the Additional field is taxed at the same rate as the regular hours are.

But if you're looking for a way to reimburse an employee for expenses you can follow these steps when running payroll or sending an off-cycle payment:

1. Log in to the Payroll section of your online Square Dashboard.
2. Click Run Payroll or New Off-Cycle Payment.
3. Enter employee hours and any additional pay > Continue.
4. Click $0.00 under the Reimbursements column > Add One-Time Reimbursement > select or create a reimbursement.
5. Add a description if needed > enter the amount > click Save.

After making all necessary adjustments, finish running payroll as usual. Reimbursements and are not taxed and will be included with the rest of the employee’s pay.

Let me know if you have any questions about this!