USA Payroll tax and Reimbursement.

[CPAisgreat]

Hi,

I'm seeking an advise on tax issue related to payroll and reimbursement.

Is it better to get a 2$/hr pay raise or 320$ reimbursement per month? Note: we never work over time so it is 40hr every week and with 2$/hr pay raise will leave us 320$.

I think it is better to get 320$ reimbursement per month since we can avoid payroll taxes which benefit both the employee and the employers.

Am I correct?

Thank you in advance,

 

[kirby]

Yes. The pay raise is taxable the reimbursement is not. But the reimbursement must repay you for what you really spent else this is tax fraud

 

[CPAisgreat]

Hi,

Thank you for the info and yes I understand that, I usually take my own car to go places and didn't get reimbursed for. I'm think either asking for raise or asking to get those gas money reimbursement to me.

I appreciated your advise.