Employers have the option to pay an employee a daily allowance to cover business related expenses while traveling. “Per Diem” means “for each day.” For a closer look, see our blog article What Is Per Diem?
To Pay Per Diem in Patriot Software
In most cases, per diem is not taxable. We suggest you confirm with your tax advisor to confirm the taxability of the per diem you are paying to your employees. Nontaxable per diem is paid as a nontaxable reimbursement in Patriot Software.
First, confirm you have a nontaxable Expense Reimburse money type set up. This money type is set up by default in your payroll account. Go to Settings > Payroll Settings > Hours & Money Types > Under the Money Types list, look for “Expense Reimburse” and confirm the Taxable column is set to “No.”
When you run a payroll on Step 1, if the Expense Reimburse Money Type is not a frequently used pay type, toggle the “Show All Pay Types” switch so the Expense Reimburse field displays.
Enter the total amount of per diem to be paid for this pay period. Continue with your normal payroll process.