Business Expense Reimbursement Policy Template

What a business expense reimbursement policy should include (+ how to use this template)

Your company’s business expense reimbursement policy is all about setting proper expectations about what expenses are (and are not) reimbursable, and answering all of the most frequently asked questions about this particular topic. There’s a balance to strike between keeping the company budget on-track and supporting your employees, but it’s very possible to walk that line well. Your employees are occasionally going to purchase items that are work-related, will need to travel for work, or will need to buy dinner for a promising prospect or a much-loved client. For eligible expenses, you should reimburse that employee in full, and make sure you have all the related documentation to support that expense. 

Who should the policy apply to?
In our example reimbursement policy, we’ve applied it to all full-time employees, part-time employees, and interns.

 

What is a reimbursable expense? 
To be reimbursable, we suggest that all expenses must meet the following criteria: 

• Expenses must have a business connection: they must have been paid or incurred while performing services as an employee of the employer.
• These expenses must be accounted to the employer within a reasonable period of time.
• Any excess reimbursement or allowance must be returned within a reasonable period of time.

Here are a few examples of expenses that are almost always reimbursed:

• Business travel and accommodation
• Local transportation
• Conferences, education, and training*
• Office supplies
• Approved work-related outings, meals, or entertainment*

*These expenses must be approved prior to purchase to guarantee reimbursement. If a manager or HR does not deem them appropriate or necessary for work, the expense will not be reimbursed. 

What is a non-reimbursable expense? 

Don’t overlook this part — it’s best to be incredibly clear up front. Here are examples of expenses that would not be reimbursed under this business expense policy:

• Any non-work-related, personal purchases
• Lost personal property, like luggage
• Unauthorized upgrade on a flight, accommodation, or other service
• Expenses incurred by spouses or other non-employees
• Fines incurred while driving a company vehicle

What about travel expenses and reimbursement? 

Travel expenses include any kind of transportation and accommodation expenses that you incur when going on a business trip. Expenses related to this category that, based on your organization, may be fully or partly reimbursable include:

• Accommodations (hotels, Airbnbs, etc.) 
• Legal document expenses
• Air, train, ship or other transportation fares
• Necessary medical expenses (e.g. vaccinations)
• Local transportation during trips (taxi fares, rental cars etc.)
• Marketing and business materials
• Other minor or per diem expenses that have been approved by an employee’s manager (e.g. meals, entertaining a client)
  

When you plan to go on work-related trips, many HR or marketing departments will typically arrange for most of your accommodation and transportation costs and document these expenses. As noted above, in many cases, they will also offer a per diem for meals and/or transportation.

What should our reimbursement procedure look like?
When it comes to money, you want to be incredibly transparent with your employees so they can budget and plan accordingly. If it’s going to take weeks or months for them to see a reimbursed expense, it’s really important that you set that expectation within this policy.

Here’s the way we outlined our sample reimbursement procedure:

• Document any expenses that our company hasn’t directly arranged for. 
• Please ask for and keep all original receipts for reimbursable expenses. 
• Upload a clear copy of each receipt to EXPENSE SOFTWARE OR DIRECT CONTACT within thirty (30) days.
• Make sure the date of the expense is accurate.
• Select the appropriate category for the expense (i.e. advertising, IT, office supplies, travel, recruiting, meals, or entertainment.)
• Write any additional notes or details of the expense.
• YOUR MANAGER is responsible for approving reimbursement claims. If your manager approves your expenses, you will receive your reimbursement by check within two pay periods.

What about remote stipends?

This doesn’t apply to every company, but on occasion, we see some overlap in questions about stipends and reimbursements. It may be worthwhile to copy over that aspect of your remote work policy, if you have one.

For example:
COMPANY NAME offers a $100/month remote stipend to all hybrid and remote employees. This stipend can be used for new office equipment, such as desks, chairs, and extra monitors. It can also be used to cover costs like food, coffee, or anything else that you need to stay comfortable and productive while working remotely, such as a faster internet connection or a coworking space membership.

What about relocation expenses? 
If you’re relocating an employee, those questions should be redirected to HR and dealt with on a case-by-case basis.

Use this template