You can now decide whether an expense type should be tax free, taxable, or a combination of the two. This makes it possible to follow local rules where only part of an amount can be reimbursed tax free – for example overtime meals in Norway, where the amount is tax free up to a given limit and anything above that is taxable.
How it works
Expense types now have a Taxation tab where you choose how the amount should be treated:
- Fully tax free (default): the whole amount is tax free.
- Fully taxable: the whole amount is taxable.
- Partially tax free: you enter a tax free amount, and anything above it is taxable.
When you select Fully taxable or Partially tax free, a Paycode and accounts section for taxable values appears on the Payroll-Bookkeeping tab. Here you decide how the taxable part should be posted, so it is kept separate from the tax free part and handled correctly in payroll and accounting.
This is what you see when you register an expense
When you register an expense on a taxable expense type, the taxable amount is shown in the taxable section of the expense claim, and in the claim report. You don’t need to do anything extra.