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Expense Markup, Reimbursable, and Taxable Explained

Understand the three money settings on every expense

Applies to: Billing

Three fields on the expense form affect the money: Markup Ratio, Reimbursable, and Taxable. Here's what each one does and how the math works.

Markup: Charging More Than You Paid

Markup is the percentage you add on top of what you paid. Enter it in the Markup Ratio field and the total updates as you type.

Expense Entry with Markup

A $50.00 cost at quantity 2 with 20% markup gives a total of $120.00. The $60.00 in parentheses is the marked-up unit rate.

Example: you pay $50.00 each for two overnight couriers and apply a 20% markup.

  • Cost $50.00 × Quantity 2 × Markup 20% = Total Cost $120.00
  • The marked-up unit rate shown in parentheses is $60.00 ($50.00 + 20%)
  • On the invoice, the client sees: quantity 2 at $60.00 = $120.00
  • Your margin is the $20.00 difference

Reimbursable: Paying Your Team Member Back

Tick Reimbursable when the person who paid should get the money back from the firm. It flags the expense for repayment and includes it in the reimbursable expense report. It has nothing to do with what the client is charged.

Taxable: Adding Tax on the Invoice

Tick Taxable when tax should be added to this expense on the invoice, and enter the percentage in the Tax field beside it. You can set a default tax rate per expense type at Settings > Customize > Custom Lists so you don't have to type it each time.

Note: An expense can be both reimbursable and billed to the client with markup — repaying your employee and charging your client are two separate things, and one expense record handles both.