Employee Business Expense Policy: Template, Guidelines and Best Practices

If you're looking to set up an employee expense policy for your company, this Employee Expense Company Policy template is a great starting point. It can be tailored to your specific needs and provides clear guidelines on what constitutes reimbursable expenses and the documentation required. The policy also outlines procedures for submitting reimbursement claims, including timelines and the approval process.

Having a clear and successful expense policy is crucial for any UK business. Not only does it provide clarity for employees, but it also helps protect the company from liability. By setting up a well-defined policy, you can ensure that all employees are aware of what expenses are covered and how to submit reimbursement claims. In this article, we'll cover some frequently asked questions about employee expense policies and provide some tips for creating a successful policy.

Key Takeaways

• A well-defined employee expense policy is crucial for any UK business.
• The policy should include clear guidelines on what constitutes reimbursable expenses and the documentation required.
• Having a successful policy can help protect the company from liability.

Employee Expense Policy Template

Policy Brief & Purpose

This Employee Expense Policy Template outlines the reimbursement process for employees who have incurred expenses related to work-related activities. The purpose of this policy is to ensure that employees are reimbursed for work-related expenses that are reasonable and necessary for the performance of their duties.

Scope

This policy applies to all employees who incur expenses related to work-related activities.

Policy Elements

This policy covers two categories of expenses: expenses that are paid directly by the company on behalf of employees and expenses that are paid by employees and are reimbursable. The company will reimburse all reasonable business expenses that have been approved, in part or in full as the case may be.

Travel Expenses

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

• Accommodation
• Legal document expenses (e.g. Visa)
• Air, train, ship or other transportation fares
• Necessary medical expenses (e.g. vaccinations)
• Local transportation during trips (taxi fares, rental cars etc.)
• Other minor or per diem expenses that have been approved by an employee’s manager (e.g. meals, business material)

Medical care fees after travel-related accidents may be covered by workers compensation insurance. If not, the company may reimburse employees for their medical expenses, if appropriate.

To minimize expenses, the company will contract with hotels and agencies to get the best possible prices. The company will also aim for the cheapest option when possible. For example, the company prefers booking plane tickets in economy class, unless there is a reason for upgraded travel.

The following expenses are not reimbursable:

• Expenses incurred by spouses or other non-employees who accompany employees on their travels
• Un-authorized service upgrade (e.g. business class or hotel rooms)
• Personal services (massages, beauty treatments etc.)
• Personal purchases (gifts, clothes etc.)
• Lost personal property (e.g. luggage)

Work-Related Expenses

This category includes expenses that are related to an employee either in the form of a benefit (e.g. business phone) or entertainment expenses that may occur in a business setting (e.g. professional dinners with clients or colleagues). These expenses may be capped and the employee's manager should approve them. If an employee spends more than the approved amount, they must cover the extra cost themselves.

The following work-related expenses are not reimbursable:

• Unauthorized or unscheduled business meetings with clients, partners or job candidates
• Fines incurred while driving a company vehicle
• Non-business subscriptions/ training
• Personal trips

Procedure

When employees plan to go on work-related trips, the company will typically arrange for most of their accommodation and transportation costs and document these expenses. Employees need to:

• Document any expenses that the company hasn’t directly arranged for (e.g. taxi fares). Employees should ask for bills and receipts whenever possible. They might also receive a per diem sum to cover other necessary travel expenses.
• Submit their reimbursement claim through an HRIS or submit an expense report with all necessary documentation. Employees should submit their claim/report within three months after their trip.

The employee's manager or HR are responsible for approving reimbursement claims. If the manager approves the expenses, the employee will receive their reimbursement within two pay periods by check.

When employees incur work-related expenses, they should:

• Ask for their manager’s approval.
• Submit a reimbursement claim. Employees should submit receipts and bills for business dinners and transportation within one month.

The company will investigate any excessive expenses. In cases of consistent falsified or exaggerated claims, the company may take disciplinary action.

*Disclaimer: This policy template is meant to provide

Frequently Asked Questions

Here are some commonly asked questions regarding employee expense policies:

• What is an employee expense policy? An employee expense policy is a set of guidelines that defines work-related expenses and outlines the reimbursement claim process. The policy promotes accountability and transparency in expense management.
• Why is an employee expense policy important? An employee expense policy is important because it ensures transparency in expense management, promotes accountability, and provides clarity on reimbursable expenses to employees.
• What should an employee expense policy include? An employee expense policy should define work-related expenses, set guidelines for documentation, and outline the reimbursement claim process. The policy should also mention the consequences of falsified or exaggerated claims.
• How should employees submit their expenses? Employees should document their expenses, obtain necessary receipts, and submit a reimbursement claim within the specified timeline. The claim should be approved by the relevant authority before reimbursement.
• What happens if an expense claim is exaggerated or falsified? Excessive or falsified claims will be investigated, and consistent violations may lead to disciplinary action. It is important to ensure that all claims are accurate and supported by necessary documentation.

It is important to check your company's employee expense policy and ensure that you understand the guidelines for submitting expenses. If you have any questions or concerns, you should contact your supervisor or the HR department. Signed, Wise.

Frequently Asked Questions

What are considered legitimate expenses under an employee expense policy?

An employee expense policy should clearly state what types of expenses are considered legitimate. Typically, expenses that are incurred while conducting business on behalf of the company are allowed. This may include travel expenses, accommodation expenses, meal expenses, and other expenses that are necessary for conducting business. However, it is important to note that the policy should clearly state what is considered a legitimate expense and what is not.

How should an employee submit expenses for reimbursement?

The policy should clearly outline the process for submitting expenses for reimbursement. This may include the forms that need to be completed, the documentation that needs to be provided, and the timeline for submitting expenses. In addition, the policy may outline the process for submitting expenses electronically, which can streamline the reimbursement process.

What are the time limits for submitting business expenses for employees?

The policy should clearly state the time limits for submitting business expenses for reimbursement. This may include the timeline for submitting expenses after they are incurred, as well as the timeline for submitting expenses for reimbursement after they are approved. It is important to adhere to these timelines to ensure that expenses are properly reimbursed.

What procedures are in place for disputing or querying expense claims?

The policy should outline the procedures for disputing or querying expense claims. This may include the process for appealing a denied expense claim, as well as the process for disputing an expense that has been approved but is in question. It is important to have clear procedures in place to ensure that disputes are handled fairly and efficiently.

How does the expense policy align with tax regulations?

The policy should align with tax regulations to ensure that expenses are properly reported and deducted. This may include guidelines for allowable expenses, as well as guidelines for recording and reporting expenses. It is important to consult with a tax professional to ensure that the policy is in compliance with all relevant tax regulations.

What are the guidelines for allowable travel expenses in an employee expense policy?

The policy should clearly outline the guidelines for allowable travel expenses. This may include guidelines for transportation, accommodation, meals, and other expenses related to travel. It is important to have clear guidelines in place to ensure that employees are not incurring unnecessary expenses while conducting business on behalf of the company.

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