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Want to save time and money on payroll expenses? Use this free expense report template for your company.
The “employee expense policy template” is a free report that helps to organize and document employee expenses. This report can be used as a policy or just for documentation purposes.。
Employees may easily input the specifics of business-related costs that will be reimbursed, and employers can keep track of such expenses for payroll reasons using an expense report template. Monitoring your employees’ spending may aid in payroll processing by providing appropriate tax documents.
We’ve designed a free expenditure report form to help you keep track of your workers’ work-related spending. We also propose that you establish a formal employee expenditure policy, or a written guideline, that workers must follow when filing costs for work-related goods. This may assist to clear up any ambiguity and guarantee that staff are held responsible for their expenditures.
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Download and adapt our spending report and policy templates as required.
Bento for Business is a great tool to keep tabs on employee spending and keep track of costs. Its prepaid credit cards let you track employee spending and provide reports for each employee’s card in a matter of seconds. You may also transmit such reports directly to your accounting software, which will make the whole bookkeeping process much easier.
Expenses That Can Be Reimbursed
Approved and non-approved reimbursable costs, as well as those needing pre-approval, should all be included on your report and in your policy. While our spending policy form is quite simple, if your staff often travel or entertain customers, you may wish to clarify which charges are deemed permitted. You might also impose a daily spending restriction (per diem) on employees, which typically ranges from $50 to $200 per day, depending on your state and allowed costs.
Approved
Some businesses provide a variety of allowable costs, such as meals while on the road or mileage reimbursements. Most firms restrict the types of costs that are allowed by the IRS, which might include:
- Meals consumed when traveling or meals consumed for business purposes (e.g., a sales lunch)
- Car rental
- Expenses for lodging
- Tolls and parking
- kilometerage (58.5 cents per mile)
Other non-traditional charges that may be authorized include:
- Supplies for a remote office (e.g., computer and printer)
- Benefits for employees (e.g., T-shirts and coffee mugs)
- a meal (e.g., pizza for a company event and donuts for a meeting)
- Entertainment
Nonapproved
Some businesses prefer to provide instances of non-approved costs. This usually refers to booze, but it may also refer to things like service class. You may wish to compensate traveling employees for coach or business-class flights but not first-class.
Many businesses believe that an employee’s desire for a glass of wine with dinner should be treated as a personal cost; others simply establish a daily or per-meal limit without specifying the sort of expense.
Pre-approval is required.
Some organizations ask workers to pre-approve all or most of their spending, and companies should give employees with guidance on how to do so. Your sales staff, for example, may not need your consent to purchase petrol for a sales trip in the business car, but you may want them to get your approval before booking an out-of-town flight for a client meeting.
Consider several scenarios or situations, and then write down the kind of costs and/or monetary amounts for which your staff will need permission before spending money and filing an expense. You may also include remarks in your expenditure report to inform staff about the reimbursement limitations or amounts.
Guidelines for Creating an Expense Report
If you’re making your own expenditure templates or changing the ones we’ve supplied, keep the following in mind:
Requirements for Approval
Be careful to convey what else your workers need to give in addition to an expense report form (such as original receipts, pictures of receipts, dates, times, client names, and reasons for expenses). To avoid problems, this is generally the area of your cost policy that has to be as explicit as possible.
You may wish to add columns to track customer name and reason, depending on whatever expense report template you choose. To make data input simpler for the accounting staff, some organizations go so far as to compel each employee to allocate each expenditure to a cost center.
Make it clear in your policy that any spending that exceeds the limit, if one has been established, requires permission. If team members purchase pricey equipment, this may be an excellent policy.
Specifics of the submission
Notify your workers of how they may submit expenditure reports to you, whether it’s via their supervisor, HR, or your payroll provider. To eliminate confusion, we suggest having a single point of contact (POC) for monitoring reimbursable employee costs. In your accounting system, the POC may also guarantee that costs are correctly assigned to the respective cost center.
You should also tell your employees how frequently they should report costs, such as right away or on the first of the month. List the day of the month or date by which they must submit cost reports, as well as whether or not the expenses expire.
Monthly and quarterly reimbursement cycles are the most typical, with an expenditure filing deadline of at least 5–10 days before the next payroll cycle. If you submit your costs late, you may be reimbursed the next pay period.
Documentation & Implementation
Using an expense report form, such as our template above, is the most popular method of documenting employee spending. Regardless of the approach you adopt, you should keep track of employee expenditure numbers and ensure that they are reasonable.
We suggest saving your cost form template to your company’s shared disk or leaving copies in a shared folder accessible to all employees. Before you disseminate your cost reporting policy to workers, get it reviewed by an accountant or HR specialist. Then, after you’ve finished it and the supporting form, make sure that all workers have a copy and are familiar with it (e.g., hold a companywide meeting or video call).
Make a copy of the expenditure policy for each employee to sign and date, and keep it in their personnel files (electronic or paper is fine). Your company’s employee handbook should also include the expenditure policy.
Payroll Effects of Expense Reimbursements
When an employee gets paid for costs performed on behalf of the firm, the distribution of the reimbursement might have an impact on payroll calculations. Because the reimbursement amount is included in the employee’s taxable income when paid via payroll with a nonaccountable plan, it raises the employee’s gross pay. Any connected taxes (such as Social Security and Medicare) are deducted as well.
Conclusion
It’s rather simple to design and execute an employee expenditure policy and an employee expense report form. Download our free templates to get insight into your workers’ spending and keep track of important information.
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The “expense policy and procedure” is a free employee expense report template that can be used for any company. The template includes information about the policy, who should use it, and how to use it.
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