Reimbursement plan

Reimbursement plan,

Definition of Reimbursement plan:

  1. A plan that reimburses employees for various kinds of out-of-pocket expenses. For example, a plan might reimburse employees for travel expenses or for the use of personal vehicles. Most companies require that employees submit detailed records of expenses in order to be reimbursed.

  2. A generic term for several types of plans that reimburse employees for various types of work-related expenses. These expenses can include medical, auto, travel, meal and entertainment costs. Reimbursement plans are instituted by employers in order to allow them to pay for a more accurate amount of employee expenses incurred, instead of having to provide a broad allowance or increase in compensation to cover them.

  3. Reimbursement plans can take many forms, such as accountable and non-accountable plans, de minimis fringe benefits, or automobile mileage and travel allowances. Employees cannot take personal deductions of any kind for expenses that are covered under a reimbursement plan. Employees must submit adequately detailed records of expenses via logs or receipts in order for employers to be able to deduct the reimbursements.

Meaning of Reimbursement plan & Reimbursement plan Definition