{"id":85196,"date":"2022-11-01T23:55:02","date_gmt":"2022-11-01T21:55:02","guid":{"rendered":"https:\/\/factorialhr.com\/blog\/?p=85196"},"modified":"2023-01-25T14:17:11","modified_gmt":"2023-01-25T12:17:11","slug":"expense-reimbursement","status":"publish","type":"post","link":"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/","title":{"rendered":"Expense reimbursement through payroll"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">According to the <\/span><a href=\"https:\/\/www.dol.gov\/agencies\/whd\/flsa\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Fair Labor Standards Act (FLSA)<\/span><\/a><span style=\"font-weight: 400;\">, you are <\/span><b>not legally required to offer expense reimbursement to your employees unless the expense drops an employee\u2019s pay below the established minimum wage<\/b><span style=\"font-weight: 400;\">. However, most organizations choose to do so as it is generally considered to be <\/span><b>fair and common practice<\/b><span style=\"font-weight: 400;\">. It can also help to create a <\/span><b>better employee experience<\/b><span style=\"font-weight: 400;\">, provided you create a clear and consistent policy for effective expense management. This means defining what you accept as an employee expense, how employees submit expense reimbursement requests, and how you incorporate expenses into your payroll process. You also need to understand what the IRS classifies as an expense from a tax point of view.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This guide will explain everything you need to know about expense management, including the expense reimbursement laws that you need to be aware of.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/factorialhr.com\/request-demo\"><img decoding=\"async\" class=\"alignnone wp-image-86553\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18151749\/free-demo-300x103.jpg\" alt=\"\" width=\"670\" height=\"230\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18151749\/free-demo-300x103.jpg 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18151749\/free-demo.jpg 675w\" sizes=\"(max-width: 670px) 100vw, 670px\" \/><\/a><\/p>\n<p><b><div class=\"js-toc toc\">\n<p class=\"js-toc-title toc__title\">Table of Contents<\/p>\n<nav id=\"fac_toc_nav\" class=\"js-toc-nav toc__nav\" aria-label=\"Table of Contents\"><ol class=\"toc__list toc__list--level-1\"><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-1\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#what-is-expense-reimbursement\" title=\"What is expense reimbursement?\" data-target-id=\"what-is-expense-reimbursement\">What is expense reimbursement?<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-2\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#types-of-expense-reimbursement\" title=\"Types of expense reimbursement\" data-target-id=\"types-of-expense-reimbursement\">Types of expense reimbursement<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-3\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#are-expense-reimbursements-taxable\" title=\"Are expense reimbursements taxable?\" data-target-id=\"are-expense-reimbursements-taxable\">Are expense reimbursements taxable?<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-4\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#how-to-manage-expense-reimbursements\" title=\"How to manage expense reimbursements\u00a0\" data-target-id=\"how-to-manage-expense-reimbursements\">How to manage expense reimbursements\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-5\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#expense-reimbursement-best-practices\" title=\"Expense reimbursement best practices\u00a0\" data-target-id=\"expense-reimbursement-best-practices\">Expense reimbursement best practices\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-6\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#automate-expense-reimbursement-through-payroll-with-factorial\" title=\"Automate expense reimbursement through payroll with Factorial\u00a0\" data-target-id=\"automate-expense-reimbursement-through-payroll-with-factorial\">Automate expense reimbursement through payroll with Factorial\u00a0<\/a><\/li><\/ol><\/nav><\/div><\/b><\/p>\n<h2><b>What is expense reimbursement?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Expense reimbursement is the process of repaying employees for any <\/span><b>work-related out-of-pocket expenses<\/b><span style=\"font-weight: 400;\"> they may have incurred. These might include expenses related to <\/span><b>travel, tools and supplies, general business expenses, and employee stipends<\/b><span style=\"font-weight: 400;\">. Many organizations also reimburse expenses related to <\/span><b>medical expenses, wellness initiatives, training and development, and equipment for employees who work remotely<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As an employer, if you do not provide your employees with a corporate credit card to cover any expenses that you cover, you need to ensure you have a <\/span><b>clear expense reimbursement policy in place<\/b><span style=\"font-weight: 400;\">. That way, your employees will understand which expenses they will be reimbursed for, what the process for claiming is, and what your <\/span><b>expense management procedures<\/b><span style=\"font-weight: 400;\"> are. You also need to make sure you have a system in place for <\/span><a href=\"https:\/\/factorialhr.com\/blog\/time-and-expense-tracking\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">time and expense tracking<\/span><\/a><span style=\"font-weight: 400;\"> and reporting. This will help you monitor your overall business expenses to ensure they remain within budget.<\/span><\/p>\n<h2><b>Types of expense reimbursement<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Most organizations will encounter situations where they need to reimburse employees for certain expenses. This means that you need to have a <\/span><b>clear understanding of what types of expenses they can claim for, and where you stand from a tax point of view<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s start by looking at the different types of expense reimbursements that you might offer your employees.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to <\/span><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p535.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">IRS Publication 535, Business Expenses<\/span><\/a><span style=\"font-weight: 400;\">: \u201c<\/span><b><i>To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.<\/i><\/b><span style=\"font-weight: 400;\">\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Generally speaking, this can include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Business expenses<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Auto mileage and travel reimbursement<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Medical expense reimbursement<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employee stipends reimbursement<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Let\u2019s take a look at these types of expense reimbursement in a bit more detail.<\/span><\/p>\n<h3><b>Business expenses<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Business expenses are classified as any costs that an employee has incurred whilst performing the duties of their job. According to the <\/span><a href=\"https:\/\/www.irs.gov\/publications\/p463#en_US_2021_publink100033749\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">IRS<\/span><\/a><span style=\"font-weight: 400;\">, reimbursable expenses usually include the following:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Business travel costs<\/b><span style=\"font-weight: 400;\">. This is an expense that one of your employees incurs during the course of work-related travel. This usually includes transportation (flights, trains, cabs, etc.) and accommodation. Meals and entertainment costs are only classified as business reimbursable expenses if they meet the criteria outlined in IRS Publication 463.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Education or training<\/b><span style=\"font-weight: 400;\">, provided training is directly related to an employee\u2019s role.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Business supplies<\/b><span style=\"font-weight: 400;\">. Any supplies that an employee purchases for business purposes. You can reimburse these expenses at cost, provided your organization has an accountable plan.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Business tools<\/b><span style=\"font-weight: 400;\">, such as tools and equipment used in your trade or computer software.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Miscellaneous business-related expenses<\/b><span style=\"font-weight: 400;\">, such as petty cash or professional membership fees.<\/span><\/li>\n<\/ul>\n<h3><b>Auto mileage and travel reimbursement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The IRS also accepts auto mileage and travel expenses as a form of eligible employee expense reimbursement.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Standard mileage<\/b><span style=\"font-weight: 400;\">: The mileage corresponding to an employee\u2019s business use of a personal vehicle whilst commuting to and from work or travelling to meet clients, for example. Most organizations use standard IRS mileage rates, known as cents per mile, to calculate mileage expense reimbursement.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Per diem travel<\/b><span style=\"font-weight: 400;\">: You can also offer a fixed per diem allowance for accommodation if an employee travels for work. Alternatively, you can track receipts and reimburse expenses as and when they arise, although this obviously involves more work.<\/span><\/li>\n<\/ul>\n<h3><b>Medical expense reimbursement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">You might also decide to supplement or reimburse your employees for their medical expenses or health care plans. These <\/span><b>medical expense reimbursement plans (MERPs)<\/b><span style=\"font-weight: 400;\"> are sometimes used as an alternative to traditional employee health plans. Also known as <\/span><b>Section 105 plans<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>Employee stipend reimbursement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Finally, according to the IRS, you can also reimburse qualified employee stipends if you choose to include these in your employee benefits packages. This can be a <\/span><b>flexible and appealing way to attract and retain top talent<\/b><span style=\"font-weight: 400;\">. Stipends can also help to <\/span><b>create a positive employee experience and raise motivation and satisfaction levels<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Essentially, a stipend is a <\/span><b>set monthly allowance that you can offer employees for certain approved expenses<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These might include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Health stipends<\/b><span style=\"font-weight: 400;\">. Where you reimburse employees for certain qualifying medical expenses. Similar to an HRA, except they are taxable and have fewer restrictions.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Wellness stipends<\/b><span style=\"font-weight: 400;\">. Where you reimburse employees for qualifying wellness expenses, such as gym memberships and fitness trackers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Remote work stipends<\/b><span style=\"font-weight: 400;\">. Where you provide remote employees with an established monthly allowance to reimburse their home office expenses. These expenses might include equipment and high-speed internet connections, for example.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Education stipends<\/b><span style=\"font-weight: 400;\">. Where you reimburse employees for any education-related expenses. This might include tuition, student loans, and other professional development expenses. It can also include costs associated with professional training, higher education, or certifications.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<h2><b>Are expense reimbursements taxable?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">As an employer, <\/span><b>one of the many benefits of offering expense reimbursements to your employees is that some of them are deemed tax-deductible by the IRS<\/b><span style=\"font-weight: 400;\">. It\u2019s important to understand which expenses are classified as tax-deductible so that you can process them through your payroll accordingly.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For a business expense to be deemed tax-deductible, it must fall under the definition of an <\/span><b>accountable plan<\/b><span style=\"font-weight: 400;\">. An accountable plan follows IRS regulations for the reimbursement of expenses that are not counted as income. This means that reimbursements are not subject to withholding taxes or W-2 reporting.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Essentially, the expense must meet the following IRS guidelines:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The expense is classified as a <\/span><b>reasonable business expense<\/b><span style=\"font-weight: 400;\"> and has been incurred whilst an employee was performing their contracted business activities.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The employee <\/span><b>applies for the expense to be reimbursed within a reasonable period of time<\/b><span style=\"font-weight: 400;\">. The IRS defines a reasonable time as 60 days after the expense is paid or incurred.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Receipts are provided as supporting documents<\/b><span style=\"font-weight: 400;\">. These receipts need to include the date and time that the expense was incurred, how much the expense was, and what it was for.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Any <\/span><b>excess reimbursement or allowance is reimbursed by the employee within a reasonable time period<\/b><span style=\"font-weight: 400;\"> (usually 120 days). For example, if you provide an employee with $50 to purchase office supplies but they only spent $25, they must pay you back the remaining $25 that they did not spend.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If an expense that you are processing meets the above guidelines, then you do not need to deduct income tax from it or include it in the associated employee&#8217;s <\/span><b>W-2<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2><b>How to manage expense reimbursements<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Expense management is an important element of effective human resource management. It ensures that your employees are <\/span><b>reimbursed fairly<\/b><span style=\"font-weight: 400;\"> for any expenses they may have paid on your organization\u2019s behalf.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, it\u2019s important to make sure you implement a detailed <\/span><b>expense reimbursement policy with clear procedures and guidelines <\/b><span style=\"font-weight: 400;\">so that your employees understand what they need to do in order to be reimbursed for any out-of-pocket business expenses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s what you need to do.<\/span><\/p>\n<h3><b>Design your expense reimbursement policy<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The first thing you need to do is <\/span><b>create an expense reimbursement policy that clearly defines all your guidelines and procedures<\/b><span style=\"font-weight: 400;\">. That way, your employees will understand which expenses they can claim, and what the process is for submitting a reimbursement claim.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Make sure your policy covers:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The types of expenses that qualify for reimbursement.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How reimbursements need to be submitted. (It\u2019s a good idea to design a template for this unless you opt for automated expense reimbursement software. More on this shortly)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Time limits for submitting requests.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Supporting documents that employees must include with their requests. (Receipts or invoices)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The person who is responsible for approving claims for expense reimbursements. (Departmental managers, HR, finance, etc.)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Spending limits for each expense category.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Any specific suppliers and vendors that you want your employees to use.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How and when you will reimburse employees.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The consequences of expense fraud and overspending.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Once you\u2019ve defined your policy, make sure all your employees are aware of it and have access to it. Also, communicate any updates each time you review your policy.\u00a0<\/span><\/p>\n<h3><b>Standardize requests<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Make sure you create a clear and standardized process for submitting claims.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You have two options here. You can create a <\/span><b>standardized template<\/b><span style=\"font-weight: 400;\"> to gather all the information you need for each claim. However, this method can create additional work and can sometimes result in inconsistencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A much more effective way to standardize your requests is by usually <\/span><b>expense automation tools and software<\/b><span style=\"font-weight: 400;\">. That way, it\u2019s much easier for you and your employees to keep track of expenses. And once an employee sends a request, the system automatically sent to the right person for them to review it.\u00a0<\/span><\/p>\n<h3><b>Centralize all expenses<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">It\u2019s also important to centralize all your expenses so that you can access all your data from one place. Centralization is also essential if you receive a high volume of expense reimbursement requests from multiple departments. Plus, it makes it much easier to <\/span><a href=\"https:\/\/factorialhr.com\/blog\/setting-up-payroll-for-small-business\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">set up payroll<\/span><\/a><span style=\"font-weight: 400;\"> when data is centralized so that taxes can be applied to reimbursements where necessary. <\/span><a href=\"https:\/\/factorialhr.com\/blog\/expense-management-software-tool\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Expense management software<\/span><\/a><span style=\"font-weight: 400;\"> can be a great solution for this.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another important benefit of centralizing all your expenses is that both you and your employees get a <\/span><b>much better user experience<\/b><span style=\"font-weight: 400;\">. Employees can see the status of their requests from their own dashboard which reduces the time that your team has to spend dealing with status update requests.\u00a0<\/span><\/p>\n<h3><b>Automate repetitive tasks<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">It\u2019s a good idea to automate as many repetitive tasks as possible. This <\/span><b>reduces the time that your team spends reviewing, approving and managing reimbursement requests<\/b><span style=\"font-weight: 400;\">. It also helps you <\/span><b>ensure accuracy<\/b><span style=\"font-weight: 400;\">, especially in terms of tax deductions where applicable. And the faster you process expenses, the quicker you can reimburse your employees and the happier your workforce will be.<\/span><\/p>\n<h3><b>Track your expenses<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Finally, make sure you regularly track your expense data by generating <\/span><b>regular expense reports<\/b><span style=\"font-weight: 400;\">. This will help you identify if any specific employees or departments are overspending or requesting reimbursements for unqualified expenses. Tracking a regular expense report will also help you align your expenses with your defined budgets.\u00a0<\/span><\/p>\n<h2><b>Expense reimbursement best practices<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here are a few <\/span><b>expense reimbursement tips and best practices<\/b><span style=\"font-weight: 400;\"> to help your policies and procedures run as smoothly as possible.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Where possible, reimburse business expenses under an <\/span><b>accountable plan<\/b><span style=\"font-weight: 400;\"> to lower taxable business income.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Ask your employees for <\/span><b>detailed receipts<\/b><span style=\"font-weight: 400;\"> for all expenses that they make a claim for. Receipts should include the name of the supplier, the date and time of the purchase, and an itemized list of all purchased items. Scrutinize all receipts to make sure all items qualify under your list of eligible expenses.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Include a detailed explanation of what the <\/span><b>consequences of expense fraud<\/b><span style=\"font-weight: 400;\"> are in your policy. If you detect a suspicious claim, investigate it and, where appropriate, enforce these consequences.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Make sure you <\/span><b>enforce your expense reimbursement policy consistently at every level of your organization, including your executives<\/b><span style=\"font-weight: 400;\">. Make sure they understand that they must follow all your guidelines and procedures when they make a claim for expense reimbursement.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It\u2019s also a good idea to <\/span><b>set spending limits<\/b><span style=\"font-weight: 400;\"> and explain what the consequences are if an employee overspends.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Review your expense reimbursement policy regularly<\/b><span style=\"font-weight: 400;\">. Make sure it complies with any federal and state updates relating to tax and expense reimbursement laws. Share your policy with all your employees each time you update it so that they are aware of any changes.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Use the right tools and software to help you create efficient expense management processes and procedures<\/b><span style=\"font-weight: 400;\">. An expense management solution is the best option for this. Make sure that the solution you pick can be easily integrated with your <\/span><a href=\"https:\/\/factorialhr.com\/blog\/payroll-software\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">payroll software<\/span><\/a><span style=\"font-weight: 400;\">. Ideally, it should also enable you to automate repetitive tasks to help you streamline the process.<\/span><\/li>\n<\/ul>\n<p><a href=\"https:\/\/factorialhr.com\/expense-management-software\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone wp-image-86558\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18152726\/payroll-reimb-banner-300x103.jpg\" alt=\"\" width=\"682\" height=\"234\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18152726\/payroll-reimb-banner-300x103.jpg 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/18152726\/payroll-reimb-banner.jpg 676w\" sizes=\"(max-width: 682px) 100vw, 682px\" \/><\/a><\/p>\n<h2><b>Automate expense reimbursement through payroll with Factorial<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As we just explained, using the right tools and software can help you create an efficient and streamlined process for effectively managing all your expense reimbursement claims.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, with Factorial\u2019s expense management software solution:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employees can <\/span><b>automatically upload their expenses and receipts<\/b><span style=\"font-weight: 400;\"> and classify expenses according to categories.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Managers can <\/span><b>review expenses<\/b><span style=\"font-weight: 400;\"> in their own time and <\/span><b>accept or deny reimbursement requests<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">HR or finance can <\/span><b>automatically generate expense reports<\/b><span style=\"font-weight: 400;\"> and gain valuable insight into where money is being spent.<\/span><\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-85199 size-full\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/01235326\/expense_reim_image.gif\" alt=\"expense reimbursement\" width=\"1865\" height=\"878\" \/><\/p>\n<p><span style=\"font-weight: 400;\">This makes it much easier for you to track all the expenses that your organization accrues. Plus, you can <\/span><b>automate your expense reimbursement processes and integrate them with our payroll software<\/b><span style=\"font-weight: 400;\">. That way, you can be sure that you reimburse your employees on time and apply the right taxes where appropriate.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Check out this <\/span><a href=\"https:\/\/www.youtube.com\/watch?v=v8-5-NmSoHA\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">video for Factorial expense on our YouTube channel<\/span><\/a><span style=\"font-weight: 400;\"> for more information on how our intuitive solution can help you create an effective expense management process for your small business. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Fair Labor Standards Act (FLSA), you are not legally required to offer expense reimbursement to your employees unless the expense drops an employee\u2019s pay below the established minimum wage. However, most organizations choose to do so as it is generally considered to be fair and common practice. It can also help to<a href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\" class=\"read-more\"> [&#8230;]<\/a><\/p>\n","protected":false},"author":80,"featured_media":85197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[95,146],"tags":[],"class_list":["post-85196","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alle-funktionen","category-legal-hr"],"acf":{"topics":false},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Expense reimbursement through payroll | Factorial<\/title>\n<meta name=\"description\" content=\"What is expense reimbursement and how can you create an effective policy for your employees? Definition, expense types, laws, best practices\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Expense reimbursement through payroll\" \/>\n<meta property=\"og:description\" content=\"What is expense reimbursement and how can you create an effective policy for your employees? Definition, expense types, laws, best practices\" \/>\n<meta property=\"og:url\" content=\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\" \/>\n<meta property=\"og:site_name\" content=\"Factorial\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/people\/Factorial\/100064908455810\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-01T21:55:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-25T12:17:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2022\/11\/01233319\/expense-reimbursement.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"830\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Cat Symonds\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@factorialapp\" \/>\n<meta name=\"twitter:site\" content=\"@factorialapp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Cat Symonds\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"11 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\"},\"author\":{\"name\":\"Cat Symonds\",\"@id\":\"https:\/\/factorialhr.com\/blog\/#\/schema\/person\/39a0e312e3aae9ac2b6461196e8b1620\"},\"headline\":\"Expense reimbursement through payroll\",\"datePublished\":\"2022-11-01T21:55:02+00:00\",\"dateModified\":\"2023-01-25T12:17:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\"},\"wordCount\":2253,\"publisher\":{\"@id\":\"https:\/\/factorialhr.com\/blog\/#organization\"},\"articleSection\":[\"Factorial Funktionen\",\"Legal &amp; Finance\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\",\"url\":\"https:\/\/factorialhr.com\/blog\/expense-reimbursement\/\",\"name\":\"Expense reimbursement through payroll | Factorial\",\"isPartOf\":{\"@id\":\"https:\/\/factorialhr.com\/blog\/#website\"},\"datePublished\":\"2022-11-01T21:55:02+00:00\",\"dateModified\":\"2023-01-25T12:17:11+00:00\",\"description\":\"What is expense reimbursement and how can you create an effective policy for your employees? 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