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TAXLEARNING(Enthusiast)Enthusiast
31 May 2021

Hi Everyone,

I have a client who wants to reimburse all the purchases done by his employee in order to finish the job.

These mostly are Bunnings purchases.

Do I need to report these via payroll ?

or the client can reimburse this cost to the employee via bank transfer from their company account and claim a deduction for it.The employee has provided the receipt.

According to me the expense belong to the company and hence company will claim it.

Please advice what is the right treatment.

Thanks,

Tax Learning

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TaxedoMask(Devotee)Devotee
31 May 2021

I agree with your assessment.

Generally speaking these expense (assuming its all work related and purchased on behalf of the company) should belong to the company and not the employee. These should not go through the payroll for the employee.

It's essentially saying to an employee - "hey go buy XYZ for the company and I'll pay you back."

This is different to "allowances" for employee related expenditure as these types of expenditure are specifically for said employee (rather than for or on behalf of the business as a whole).

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Most helpful reply

TaxedoMask(Devotee)Devotee
31 May 2021

I agree with your assessment.

Generally speaking these expense (assuming its all work related and purchased on behalf of the company) should belong to the company and not the employee. These should not go through the payroll for the employee.

It's essentially saying to an employee - "hey go buy XYZ for the company and I'll pay you back."

This is different to "allowances" for employee related expenditure as these types of expenditure are specifically for said employee (rather than for or on behalf of the business as a whole).

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