Expense reimbursement policy template for employees
Right now, reimbursements at your company probably run on memory. One manager pays back mileage within a week, another sits on a hotel receipt for two months, and nobody can say what the deadline is. Then, your first employee abroad asks which currency they'll be paid in, and nobody has an answer for that either.
A written expense reimbursement policy settles every one of those questions before they turn into a back-and-forth on Slack, including the one about currency.
Check out the template below, fill in the brackets, and paste it into your handbook. The submission and repayment deadlines already match the IRS rules that keep reimbursements out of employees' taxable wages.
Key takeaways
- A reimbursement policy only works when its deadlines are specific, so employees know exactly when to submit and when they'll be paid.
- Under the IRS safe harbor, expenses backed up with receipts within 60 days and extra advance money returned within 120 days count as a reasonable period of time (26 CFR §1.62-2).
- Expensify reimburses employees in 160+ currencies across 190+ countries, so your policy can promise a currency instead of a workaround.
- A policy that meets the IRS accountable plan rules keeps reimbursements out of employees' taxable wages.
- Copy the template, set your limits, and add the international clause before your first hire abroad.
What should an expense reimbursement policy include?
If your handbook covers reimbursements in a single paragraph, the same questions probably keep landing in your inbox. A complete employee expense reimbursement policy answers them before anyone has to ask, in eight sections.
Purpose and scope. Why the policy exists and who it covers, including employees in other countries.
Eligible expenses. What the company pays back, with limits by category.
Ineligible expenses. What it won't pay back, so nobody has to argue about it later.
Documentation. Which receipts employees need and what to do when one goes missing.
Submission deadline. How long employees have to submit an expense after paying for it.
Approval and payment. Who approves expenses, and how and when employees get paid.
International reimbursements. Which currency employees are paid in and which exchange rate applies.
Non-compliance. What happens to late, missing, or false claims.
Employees read the eligible expenses section first, so give it the most care. If you're not sure where to draw the line, start with a standard list of reimbursable expenses and adjust it to the way your team actually works and travels.
Expense reimbursement policy template
This employee expense reimbursement policy template covers reimbursements only. If you also need rules for company cards and travel booking, treat it as one section of a wider expense policy template.
Replace everything in [brackets] with your company's details, and delete any clause that doesn't apply. Each clause stands on its own, so you can also lift one into an expense reimbursement policy you already have.
[Company name] pays employees back for reasonable business expenses they pay for out of pocket while doing their jobs. This policy explains which expenses are covered, what proof you need, when to submit, and how you'll be paid.
[Company name] wrote this policy to meet the IRS requirements for an accountable plan, so reimbursements under it aren't treated as taxable wages.
This policy applies to all [full-time, part-time, and temporary] employees of [Company name], including employees based outside [home country]. [Contractors are reimbursed under the terms of their contracts, not under this policy.]
[Company name] reimburses ordinary and necessary expenses you pay for while doing company business, including the following.
- Travel. Airfare, train, and bus tickets in [economy class], plus taxis, rideshares, tolls, and parking.
- Lodging. Standard hotel rooms up to [$X per night], or at the company's [preferred hotels].
- Meals. Meals while traveling overnight or meeting with clients, up to [$X per day] or [the company's per diem rate].
- Mileage. Business use of your personal vehicle at the IRS business standard mileage rate in effect on the date of travel, which is 76 cents per mile for trips from July 1 to December 31, 2026.
- Supplies and equipment. Items under [$X] that you need for your work, with manager approval for anything more.
- Client entertainment. [With approval in advance, up to $X per person.]
- Other. [Training and conference fees, work phone or internet costs, or other expenses your manager approves in advance.]
- Personal expenses, including personal days added to a business trip
- Commuting between your home and your usual workplace
- Traffic tickets, parking fines, and towing
- Alcohol, [unless it's part of approved client entertainment]
- Seat or class upgrades, [unless approved in advance]
- Lost or stolen personal property
- Expenses already paid back by a client, an insurer, or anyone else
Submit an itemized receipt for every lodging expense and for any other expense of [$75] or more. Each expense needs the date, amount, merchant, and business purpose, plus the names of attendees for meals and entertainment.
If you lose a receipt, submit a signed missing receipt statement with the same details. [Company name] won't reimburse an expense over [$X] without a receipt.
Submit each expense within 60 days of the date you paid for it. Expenses submitted after 60 days [won't be reimbursed / will be paid through payroll as taxable wages].
Your manager reviews each expense against this policy before it's paid. Expenses over [$X] also need approval from [your department head / finance]. Nobody can approve their own expenses.
[Company name] pays approved expenses within [X business days] of approval, by [direct deposit to your bank account / your regular paycheck]. Reimbursements under this policy aren't taxable wages.
If you get a travel advance, [Company name] will pay it no more than 30 days before you expect to spend it. Submit receipts for the advance within 60 days of the expense, and return any unspent amount within 120 days.
Any amount not accounted for after 120 days [will be treated as taxable wages / will be deducted from your pay where the law allows].
If you work outside [home country] or pay for expenses in another currency, the following rules apply.
- Currency. You'll be reimbursed in [your local currency / the currency of your payroll].
- Exchange rate. Expenses in another currency are converted at [the rate on your card statement / the rate from your chosen source on the date of the expense].
- Fees. [Company name] [covers / doesn't cover] foreign transaction and ATM fees on business expenses.
- Receipts. Receipts in any language are accepted. Where a country charges VAT or GST, ask for a receipt or invoice that shows the tax amount [and the company's name and tax ID], so the company can reclaim it.
- Local law. Where local law sets different reimbursement rules, local law applies.
Expenses that don't follow this policy may be declined. Submitting a false or inflated expense is grounds for disciplinary action, up to and including termination, [and repayment of any amount paid].
[Company name] reviews this policy at least once a year and will tell employees about any changes before they take effect.
By signing below, the employee confirms they've read this policy, understand it, and agree to follow it.
Employee name: ____________ Signature: ____________ Date: ____________
Why the template uses 60 and 120 days
The deadlines in the template come straight from the IRS. Under 26 CFR §1.62-2, a reimbursement arrangement is an accountable plan when it meets three requirements: a business connection, substantiation, and returning any amount over what was substantiated.
Reimbursements under an accountable plan stay out of employees' wages, while payments under a nonaccountable plan count as wages, with withholding and employment taxes to match.
Substantiation and repayment also have to happen within a reasonable period, and the regulation's safe harbor spells out what that means.
"An advance made within 30 days of when an expense is paid or incurred, an expense substantiated to the payor within 60 days after it is paid or incurred, or an amount returned to the payor within 120 days after an expense is paid or incurred will be treated as having occurred within a reasonable period of time."
When your policy uses the same numbers, nobody has to argue about what "reasonable" means. The IRS guidelines for travel reimbursement cover the record-keeping side, and this global expense policy guide compares accountable and nonaccountable plans in more detail.
How to reimburse employees in other countries and currencies
Few reimbursement templates say anything about employees in other countries. Once you have someone working abroad, the policy needs answers on currency, exchange rates, receipts, and timing, and it's easier to settle them before the first foreign receipt comes in.
Choose the reimbursement currency
Paying employees in their local currency is easiest for them, since that's what they spent and what their bank account holds. If you pay in your home currency instead, the employee's bank converts it and may charge a fee, so say in the policy who absorbs that cost.
Set one exchange-rate rule
Pick one source and one date, and use them every time. For card spend, the rate on the card statement is what the employee actually paid. For cash, use the rate on the date of the expense from a source you name in the policy, such as your accounting system or a central bank.
Ask for receipts that show local tax
In countries that charge VAT or GST, a receipt that shows the tax amount can let your company reclaim it. Some countries also require a full tax invoice with the company's name and details, so tell employees what to ask for at the counter.
Plan for payment timing
International transfers usually take longer than domestic ones, depending on the currencies and banks involved. Set your payment window with that in mind, or give international reimbursements a window of their own.
How to customize the template for your business
Most of this expense policy template works as written, but a few placeholders change how the policy works day to day. Settle these with your accountant or finance lead before you publish your employee reimbursement policy.
Spending limits by category
Set limits for the categories that vary the most, usually lodging and meals. A single company-wide number is easier to remember, while limits by city are fairer to anyone traveling somewhere expensive.
Mileage is the exception, since the template ties it to the IRS rate instead of a number you pick. Because the clause says "in effect on the date of travel," the policy stays accurate when the IRS changes the rate, as it did on July 1, 2026. The guide to the 2026 mileage reimbursement rate explains how employers apply it.
Receipt threshold
IRS rules require documentary evidence, like a receipt, for any lodging expense and for any other expense of $75 or more, with an exception for transportation when a receipt isn't readily available. You can set a lower threshold, or ask for receipts on everything, which is simpler to explain. The guide to receipt reimbursement covers what a usable receipt needs to show.
Approval thresholds
Decide which amount sends an expense to a second approver. Pick a number that catches the expenses you'd want to see twice without burying your department heads in coffee receipts.
Per diem or actual costs
With a per diem, employees get a flat daily amount for meals and incidentals and don't have to keep a receipt for every coffee. With actual costs, they're paid back exactly what they spent, with receipts. A per diem policy works well for frequent travelers, while actual costs suit teams that travel only now and then.
Running your reimbursement policy in Expensify
A written policy only helps if someone checks expenses against it, and doing that by hand gets old fast. On the Control plan, Expensify checks each expense against your rules as soon as it's submitted.
You can turn the policy's limits into workspace rules. Expensify can require receipts or itemized receipts above amounts you set, flag expenses above a limit or older than the 60 days your policy allows, and flag restricted line items like alcohol, so approvers see the problem before they approve.
SmartScan reads each receipt, including the tax amount, so employees don't have to type anything in.
When it's time to pay, Expensify reimburses employees in 160+ currencies across 190+ countries, from business bank accounts in the US, Canada, the UK, Europe, Australia, or Singapore. It converts currencies at live exchange rates, and payments from GBP, EUR, or USD accounts generally arrive within one to four business days.
If you're not ready for software yet, a free expense report template gives employees a consistent way to submit expenses under the new policy.
FAQs about employee expense reimbursement
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Under 26 CFR §1.62-2, reimbursements are excluded from an employee's wages when they're paid under an accountable plan. That means the expenses have a business connection, employees substantiate them within a reasonable period, and they return any amount they can't substantiate.
The safe harbor treats substantiation within 60 days and returning extra money within 120 days as reasonable.
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Federal rules don't set a deadline for employers to pay reimbursements. The 60-day and 120-day windows apply to employees backing up expenses and returning extra money.
Some states have their own reimbursement laws, including California and Illinois, so check the rules where your employees work and set a payment window in your policy.
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Yes. Expensify's free expense reimbursement policy template is a complete policy with 13 sections, from purpose and eligible expenses to international reimbursements and a signature line. Fill in the bracketed details, and it's ready for your handbook.
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Decide which currency you'll pay in, usually the employee's local currency, and set one exchange-rate rule, such as the card statement rate for card spend or a named source on the date of the expense for cash. Then pay through a provider or tool that can send money to the employee's country, and write all of it into the policy.
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That depends on your policy. Under the template, expenses submitted after 60 days are either declined or paid through payroll as taxable wages, since late substantiation falls outside the IRS safe harbor. Advances not accounted for within 120 days are handled the same way.
