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Per Diem with HST

vrcvrc Expensify Customer Posts: 6 Expensify Newcomer

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

Answers

  • Rachael HopkinsRachael Hopkins Expensify Success Coach - Admin Posts: 692 Expensify Team
    edited April 2018

    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.

  • vrcvrc Expensify Customer Posts: 6 Expensify Newcomer

    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 HopkinsRachael Hopkins Expensify Success Coach - Admin Posts: 692 Expensify Team
    edited April 2018

    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.

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