A non-employee who provides service to, or otherwise benefits the University, may be paid for their services and/or reimbursed for actual and necessary expenses incurred in connection with their duties or activities if:
Note: If participation is mostly to influence University decisions for the benefit of other organizations, expenses are not reimbursable.
Non-employees must comply with University policies and maximums for all transportation, meal and lodging expenses. All expenses must be documented in accordance with UW Madison receipt requirements.
Whenever possible, a UW-Madison Purchasing Travel Card should be used to pay for non-employee travel expenses, such as airfare, lodging, and registration. For service payments and other reimbursable expenses incurred by the non-employee, see below.
|I need to:||I should use:||I should use Account Code:||Is this tax reportable?|
|Pay a non-employee for services||Payment to Individual Report (PIR)||2620 (Services)||Yes|
|Pay a non-employee for services over $5,000||Requisition (Contact Purchasing Services)||2620 (Services)||Yes|
|Pay a non-employee for
both services and travel & expenses
Payment to Individual Report (PIR) Combine service payments and travel expenses into one amount.
Payment to Individual Report (PIR) for the services amount only
e-Reimbursement for travel amount
Yes (total amount)
|Pay a non-employee for travel & expenses||e-Reimbursement||Automatically assigned by system|
Whenever possible, e-reimbursements should not be used to process day-trip meal reimbursements for non-employees. Day-trip meals are taxable to the recipient, so those amounts should be combined with other taxable payments made to the non-employee. For example, instead of paying a research subject $30 for participating (via PIR, account code 2637) and $15 for a day-trip meal reimbursement (via e-Reimbursements), pay them $45 on the PIR (total amount coded to 2637).
All non-employee tax-reportable payments (i.e. honorariums, fees for service) must be submitted on a Payment to Individual Report (PIR) or paid with a Purchasing Card. Tax reportable payments are described in the 1099-MISC/1042S Tax Reportable Transactions document (1099-MISC/1042S Tax Reportable Transactions by Account Codes). Payments to Nonresident Aliens (NRA) must be paid through a PIR (see How To Determine Which Tax Related Documents are Required When Making Non-Payroll Payments at UW-Madison).
Option 1: Combine the payment for services and the reimbursement for travel expenses on the Payment to Individual Report (PIR) and report the total amount using Account Code 2620 (Services). This payment becomes tax reportable to the non-employee who will receive a 1099-MISC (1042-S for Non-Resident Aliens) for the total amount paid. The non-employee should retain receipts for travel expenses and report these as business expenses on their personal tax returns as allowable by IRS regulations.
Option 2: Request payment for services on the Payment to Individual Report (using Account Code 2620) and use e-Reimbursement for the travel expenses. The services on the PIR are tax reportable to the non-employee, but the travel in e-Reimbursement is not. The non-employee will receive a 1099-MISC (1042 for Non-Resident Aliens) for the service payment only. Receipts need to be collected by the UW as these expenses are not deductible by the non-employee on their personal tax return as per IRS regulations.
If expenses are incurred by a non-employee, Reimbursement is used to reimburse the individual. Accounting Services creates profiles for Non-employee travelers. For instructions on how to obtain a Non-Employee Profile, please see How to Obtain a Profile for a Non-Employee.