Your freelancers often pay for things while they work for you, such as travel, materials or fees, and bill those costs back to you. Line items and expense categories split each invoice into work and expenses, so your approvers can see what every amount is for, and your finance team can keep reimbursed expenses out of 1099-NEC income.

Who can do this: Admins request the expense options below. Freelancers and your team add line items to invoices.

Availability: Line items are on every invoice. Expense categories, Reimbursed Expenses treatment and the Expenses section are available on request from your Business Solutions Architect or Worksuite Support.

Your workspace may use different names for invoices, Tasks or freelancers.

TABLE OF CONTENTS

How it works

Self-employed freelancers don't file expense reports in Worksuite. They bill expenses on an invoice:

  • Each cost goes on its own line item, with an expense category such as Travel.
  • Their work goes on a separate line item with a work category.
  • Receipts go in the invoice's attachment.
  • When your invoice settings require it, the invoice is linked to the Task the cost belongs to.

Worksuite adds up the line items into the invoice total. Your approvers review and approve the invoice like any other. Invoices with expenses follow the same statuses and appear in the same list, under Invoices → All Invoices. Open an invoice there to see its line items and categories.

Some accounts also use the Expenses section, under Invoices → All Expenses. There, freelancers log each expense on its own, usually against a Task, with its date, amount, category and receipt. Your team approves expenses the same way as invoices.

Workers on Employer of Record (EOR) Contracts can't bill expenses on invoices in Worksuite. They follow their employer's expense process.

Key terms

TermWhat it means
Line itemOne row on an invoice, with a name, category, quantity, price and amount.
Expense categoryThe category on a line item that marks it as an expense, such as Travel or Meals, rather than work.
Reimbursed ExpensesTreatment for chosen expense categories so that, in the 1099-NEC forms Worksuite files, those amounts aren't counted as income.
Expenses sectionA separate list where freelancers log individual expenses, usually against a Task, for approval.

What you can request

Your Business Solutions Architect or Worksuite Support sets these up for your account. Admins can't change them in Settings:

  • The work and expense categories your freelancers can choose on line items
  • Reimbursed Expenses treatment for chosen categories
  • The Expenses section

Your freelancers can use only what's set up for your account. If a category is missing for them, it's missing for everyone on your account until you ask for it.

How expenses affect 1099-NEC reporting

You can treat the money you pay contractors for expenses in one of two ways.

As income (the default). Expense amounts count as income paid to the contractor and are included in the total reported on Form 1099-NEC. You don't need to change anything. You can still use line items and categories to see where your money goes.

As Reimbursed Expenses. If your company's expense policy treats these payments as reimbursements, the amounts shouldn't count as income in Box 1 (Nonemployee Compensation) on Form 1099-NEC. When Worksuite files your 1099s, it can leave the expense categories you choose out of those filings. If you file your own 1099s, use the categories on each line item to separate these amounts in your reports.

Important: The IRS has rules on which expenses count as reimbursements. These are usually travel costs with full receipts. Worksuite doesn't give tax advice. Ask your finance or tax team which treatment your company uses, and what receipts you need from contractors, before you request Reimbursed Expenses.

For this to work at year end, expense line items must be categorized correctly all year. If Worksuite files your 1099s, see United States Tax Filing: 1099 Form FAQ for Pay Customers.

When your freelancers can't find an expense option

These are the questions freelancers ask most, and what each one means for you:

  • "The category I need isn't there." Categories are set up for your account. Tell the freelancer which category to use, or ask your Business Solutions Architect to add one.
  • "Can my expenses be left out of my 1099?" Only if Reimbursed Expenses treatment is set up for your account. If you want it, request it as described above. Until then, the freelancer can still bill the cost on an invoice.
  • "I can't find the Expenses section." It isn't turned on for your account. Freelancers bill expenses as line items on an invoice instead, or you can request the section.
  • "There's no Task to bill against." When your invoice settings require a Task, the freelancer needs one to invoice. Assign a Task, or make sure their Contract is Live. For other invoicing blockers, see Why Your Talent Can't Create or Submit an Invoice.

Freelancers sometimes contact Worksuite Support about these. Support can't add categories or settings for one freelancer and will send them back to you, so answering them directly saves a round trip. To show freelancers how to bill an expense, share How to Bill Expenses and Request a Reimbursement.

Support/Resources

Still have questions about invoice line items and expenses? Click Support in the bottom-left corner of Worksuite to contact our Support team, or email support@worksuite.com. Including a link to the page you're on and a screenshot helps us answer faster.