Designing Employee Reimbursement Programs for Enhanced Financial Well-Being and Satisfaction

What are reimbursements? 

In simple words, a reimbursement is a monetary compensation paid to an employee who has spent that amount previously out of her/ his own pocket for an official expense. Reimbursements are also offered to employees if they have paid any amount over and above the previously paid amount. An important thing to keep in mind is that unlike regular compensations, certain reimbursements are not subject to taxation in the hands of employees. 

Key takeaways from this article - 

• Reimbursements are compensatory amounts paid by organisations to their employees for expenses that may be incurred by them, personally, on behalf of the organisation. 

• Reimbursement conditions differ from company to company. 

• They are extremely advantageous to both the employer as well as to the employees and are one of the most common employee benefits that are provided in India. 

• They help to attract new talent and retain the current employees as well. 

• The most common activities that are eligible for reimbursements are travel expenses, business expenses and medical expenses. 

• Some companies also offer allowances for fitness, education etc. and in such cases, that money is reimbursed to the employee. 

• Reimbursement programs can make employees feel cared for and valued and act as a bonus to the company as well.

Some common reasons for reimbursing employees are for business expenses like traveling for official purposes, food expenses etc. reimbursements made by insurance companies to the insurance holder for their medical bills, or reimbursements made to a person who may have made a purchase on behalf of a third party. Companies often include reimbursement programs in their company policies. There are certain regulations that define which expenses are applicable for reimbursements. These regulations differ from company to company. All organisations that offer reimbursements must ensure that the reimbursements made are for valid and legitimate reasons.

Fact - not all expenses are reimbursable!

What are the different types of employee reimbursements?

1.Insurance reimbursements

Companies often offer mediclaims, health insurance etc. to employees as a part of their employee benefit programs. However, when it comes down to it, it is difficult for employees to immediately obtain that money in times of need due to the detailed procedures required to procure it. In these situations, employees usually pay for the expenses out of their own pockets. They are later reimbursed by the company for the same if the company policies offer it.

2.Telecom expense reimbursements

With certain employee benefit packages like Pluxee’s benefit suite, employees are eligible to reimburse their mobile bill expenses, landline bill expenses, broadband expenses and their wi-fi connection expenses digitally.

3.Travel expense reimbursements

Employees often have to travel within or outside the city for client meetings, supervision, site visits, business events etc. The expenses that go into these visits are eligible for reimbursements. Whether it is public transport or personal vehicles, they are eligible for reimbursements. If the employee uses their personal vehicle to travel, they may be reimbursed for petrol/ diesel expenses.

4.Business expense reimbursements

When employees must travel to other cities for work trips, they have to spend money on food, travel, tickets, hotels etc. All of these are usually paid for by the company. If the company does not do so up front, they reimburse the amount to the employee after the employee has paid for them out of their own pocket.

5.Miscellaneous expense reimbursements

This refers to the money that may be spent by an employee out of their pocket on office items like desks, stationery, plants etc. Anything that is essential for the functioning of the workplace can be counted as an official expense. All these expenses are reimbursed if the employee can produce valid bills for the same.

6.Reimbursements provided for fitness and other allowances

Most companies offer fitness allowances, education allowances etc. to their employees. Following the reimbursement route, if the employee decides to take this up, they first pay for their tuition/ gym subscription/ fitness club membership out of their own pockets. Later, this amount is reimbursed to them along with their monthly salary, on production of valid proofs and bills. This ensures employee well-being and health. 

Reimbursements are extremely useful. They enable employees to become more creative, productive, and as a result, they can be more efficient in their work. They also maximize employee retention rates, employee satisfaction rates and help in attracting new talents as today’s work force keenly looks out for the employee benefits that are offered by companies. It is essential to lay down an effective and detailed framework before offering an employee reimbursement program to ensure that this program benefits the employees and that all the employees are taken into consideration.

FAQs

1.What’s the benefit of selecting Pluxee meal benefits for employees?Pluxee meal benefit offers a host of advantages to your employees:

•Access to India’s largest proprietary meal network of 1,00,000+ unique points of acceptance across 1,800 + cities 

•Tax savings up to ₹12,000 a year for every employee 

•Additional savings through year-round exclusive deals & discounts and access to offer portal "Pluxee Delights Premier" 

•Manage card on-the-go using Pluxee India app: track spends, block/ unblock card, change PIN, view transaction history and much more

2.How much do employees save in taxes by using this?Employees can save up to ₹12,000 in taxes by using this.

3.Where can Pluxee meal benefits be used?Pluxee meal benefit can be used across India’s largest proprietary meal merchant network of 1,00,000+ unique points of acceptance across 1,800+ cities including leading popular food portals like Zomato, Swiggy, Freshmenu, Blinkit, BigBasket, JioMart, Swiggy Instamart, Zepto and many more*

4.Can the Pluxee meal benefit be restricted to restaurants?Pluxee meal benefit can be designed to be exclusively redeemable at restaurants within the proprietary network and not be used to make grocery purchases.

5.Can Pluxee meal benefit be used to digitize corporate and educational institution cafeterias?Pluxee's NFC enabled tag-based solution can be used to make quick and contactless payments without any hassle in corporate and educational institutions cafeterias. Pluxee meal benefit usage can be restricted only in the cafeteria or select outlets on campus as per organisations/ institutes’ policy.

6.Where can the Pluxee benefit suite be used?Pluxee’s benefit suite is accepted on RuPay’s nationwide network of 50 lakhs+ retail outlets and 90,000+ online portals. The usage rules follow the particular benefit guidelines.

7.What is the Pluxee meal benefit tagged to my Pluxee benefits card?The Meal benefit tagged on the Pluxee Benefits Card is a fully digital Meal Benefit Solution. This card comes with a 3-year validity and is accepted at Pluxee-affiliated merchant outlets for the purchase of food and non-alcoholic beverages only.

8.What is the meal benefit Pluxee provides?The meal benefit is a prepaid instrument authorised by the RBI and issued by Pluxee to its client organisation. lt is accepted at Sodexo merchant outlets for food and non-alcoholic beverages.