In general, payments you make to your employees for services they'll perform or complete in the future are considered taxable wages for all payroll tax purposes.
Loans distinguished. Advances are not taxable wages if the employees are legally obligated to repay the advanced amounts. In our example, if you required Jim to sign a note or agreement that obligated him to repay the advanced amounts upon your demand or upon specified events (for example, his termination from employment), the advances would likely be considered nontaxable loans rather than taxable wages.
Advances for expenses. Advances you give employees to cover business
expenses they're reasonably expected to incur while conducting business on your
behalf are not taxable wages if the advances are for deductible expenses, and
you require employees to report what they spend. This is the same rule that
applies when you reimburse
employees for expenses they've incurred. In other words, as long as the advances
are made under an "accountable
plan," they are not taxable wages.