1. Change the rate of the deduction for the employee to zero in the Employee screen/deduction tab. This way, the deduction will not continue.

2. Open the Additional Income window and create a new income.

3. When setting up the additional income, select the calculation method that works best for you. The selection of Variable is helpful since this income will always appear as zero in the Calculate Pay screen until you override it to another number.

4. Select the Exempt From categories that are the opposite of the ones set up for the deduction you are reimbursing. For example, the deduction you are reimbursing was deducted before all taxes; federal w/h, state w/h, local w/h, SS and medicare; so the additional income will be the opposite, or not exempt from any taxes listed in the window.

5. Close the Additional Income window and open the Employee window and click on the Additional Income tab. Assign the new additional income category to all affected employees.

6. When doing you next payroll, enter hours as normal. While in the Calculate Pay window and working on the affected employee(s), change the 0.00 appearing in the box next to the new additional income to the amount you are reimbursing. Click Save Calculation. You can review the calculation in the Review Calculations screen before creating the paycheck.

7. Create paychecks as usual.