Per Diem with HST

vrc

How should we account for HST in the per diem meal rate ?

Rachael Hopkins

Hi @vrc Welcome to the Expensify Community!

Because HST is triggered at time of supply, i.e. when you buy the meal, I would assume your Policy Admin includes HST in the Per Diem rate. I.e. the Per Diem rate would be $25, not $25 + HST which would actually be a limit of $28.25 (depending on location of course)

Forgive me if I'm wrong, but I believe that if you are using a Per Diem allowance, it's treated totally differently than a regular expense+reimbursement equation.

A reimbursement is a payment made by one person to repay another person for amounts spent. An amount constitutes a reimbursement where the amount is fully accounted for by the person receiving the payment (i.e., evidenced by supporting vouchers or records). Consequently, an allowance is not a reimbursement. (Found here)

Your employer may still be able to claim a tax credit on the Per Diem, but it's considered an 'allowance' rather than an expense, so the person claiming the per diem does not need to account for HST themselves.

vrc

Thanks for the reply. However, I was asking as the employer, setting up Expensify, rather than the reimbursee. If we reimburse the employee $25, some portion of that is GST, which needs to be tracked for in our accounting system. Unless I'm missing something, Expensify will only send $25 as a bill to QuickBooks, and we need to back the tax out of the bill there.

Rachael Hopkins

Yes that's correct. The tax treatment for an allowance is different than a reimbursement. I'm afraid I can't advise you on accounting practices.