Should I Enter Employee Reimbursements in Lightning Payroll?

Unless you have the HR+ add-on and use its Reimbursements feature (see below), employee reimbursements should not be entered in Lightning Payroll as wages, allowances, bonuses or other pay items. If added to a pay that way, they will be reported to the ATO via Single Touch Payroll (STP), which can misstate an employee’s taxable earnings.

HR+ add-on: if your subscription includes HR+, the Reimbursements tab on a pay is built for this. Reimbursements entered there are not part of gross pay, are not taxable, do not attract super and are not reported to the ATO through STP; they are added to the employee’s payment amount after tax and super are calculated. They appear in your accounting journal (Xero, MYOB or a GL export) once you map Total Reimbursements to a debit and a credit line under Company >> GL Codes; see How Can I Send Data To Xero From Lightning Payroll? See How Do Reimbursements Appear On A Pay And Payslip? and How Do I Configure And Process Reimbursement Claims?

Reimbursements are typically handled separately from payroll (for example, via a direct bank transfer or petty cash), so they are not included in STP reporting.

If you want the reimbursement mentioned on the payslip without affecting pay totals or STP, add a payslip note to that pay only:

1. Open the employee’s current pay and click Edit Pay.
2. Click the Payslip Info button.
3. Type your message in the Payslip Note field (e.g. “Reimbursement of travel expenses paid separately”).
4. Click Save.

This records the information for the employee while keeping the reimbursement out of payroll figures and STP submissions.