---
title: Taxable and non-taxable categories and reimbursements
description: Understand your category guide and the differences between taxable and non-taxable reimbursements
---

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# Taxable and non-taxable categories and reimbursements

## Understand your category guide and the differences between taxable and non-taxable reimbursements

You may notice that some categories in your [Categories Guide](https://help.joon.io/allowed-purchases-vendors-merchants?hsLang=en) are labeled as **taxable** or **non-taxable.** This means that your employer will be treating reimbursements for such purchases accordingly. 

### **Taxable**

Reimbursements for taxable purchases are treated as income that must have taxes withheld. Since JOON does not withhold taxes from your reimbursement, your employer will withhold taxes in a future paycheck.

**Example:** If your company withholds taxes for JOON benefits quarterly and you received $50 in reimbursements each month of the quarter, then your company has provided you with $150 of taxable income. If your combined Federal and State tax rate is 25%, you can expect to have $37.50 deducted from a paycheck. That means that you were effectively reimbursed $112.50 toward $150 in eligible purchases!

Please speak with your HR admin for further details.

### **Non-taxable**

Reimbursements for non-taxable purchases are treated as 100% reimbursable business expenses. Your reimbursements will not be taxed and no action is required on your part.

**Note:** If you make eligible purchases in both non-taxable and taxable categories, JOON will automatically prioritize reimbursements toward non-taxable categories up to your allowance in order to minimize your tax withholdings. It does not matter the order in which the purchases are made, marked as eligible, or reported.

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