What are expense reimbursements? 2026 Singapore guide

Key takeaways:

• Expense reimbursements repay employees for business-related costs they've covered out of pocket, following a defined process from submission to payout.

• Getting this process right protects your company's financial records and keeps your team from feeling out of pocket for work they've already done.

• Airwallex Spend automates the entire reimbursement process, from receipt capture to payout, helping finance teams spend less time on manual approvals and reconciliation.

Expense reimbursements are how you pay employees back for business costs they've covered with their own money.

This guide walks through what counts as a reimbursable expense, how the reimbursement process works step by step, and the tax questions that come up most often.

If you're building a Singapore-specific reimbursement policy from scratch, our guide on what reimbursement means for Singapore businesses covers the GST and IRAS rules in more depth.

What is an expense reimbursement?

Expense reimbursement is the process of paying employees back for business costs they've covered with their own money. This includes anything necessary for their job: travelling to meet a client, buying office supplies, or covering a meal during a business trip.

Here's how the process usually works:

• Employee pays out of pocket. An employee covers a work-related cost, such as a train ticket or a client lunch, using personal funds.

• Employee collects proof. They keep the receipt or invoice as evidence of the expense.

• Employee files a claim. They complete an expense report, attaching the receipt and explaining the purpose and amount.

• Manager or finance reviews the claim. The approver checks that the claim matches the receipt and follows company policy.

• Finance processes payment. Once approved, the reimbursement is added to the next payroll cycle or paid out separately.

• Finance records the transaction. The reimbursement is logged in the accounting system for auditing and budget tracking.

6 common expenses for reimbursement

Every company sets its own reimbursement policy, but certain expense categories show up in almost every business. Here's what typically qualifies:

1. Travel expenses

Airfares, train tickets, and mileage for a personal vehicle used on company business all fall under travel expenses. Employees usually claim these when travelling to meet clients or attend conferences.

2. Accommodation

Hotel stays are reimbursable when an employee needs to travel away from their home base for work. Most companies set a nightly cap to keep costs predictable.

3. Meals

Meals during business trips or team events are usually claimable, though companies often set a daily or per-meal limit. Reasonable spending is the general expectation.

4. Office supplies

Stationery and minor equipment employees buy to do their job are typically reimbursed. These purchases tend to be small and infrequent enough that most policies don't require pre-approval.

5. Conference and training fees

Costs tied to professional development, such as workshops or industry events, are often treated as an investment in the employee and the business. Most policies reimburse these in full when the training is job-related.

6. Client entertainment

Meals and event tickets used to entertain clients are usually reimbursable, since they support building and maintaining business relationships. Companies often cap these to prevent overspending.

Do I need receipts to reimburse an employee?

Yes, in most cases. You need a physical or digital receipt to reimburse an employee for a business expense.

A receipt proves the cost, purpose, and date of the expense, which keeps the claim aligned with your company's policy. It also gives your finance team a clean audit trail if your books get reviewed.

Some companies allow small claims below a set threshold without a receipt. Even so, keeping a full record of every transaction is good practice, since it protects you if a claim is ever questioned.

A clearly enforced expense policy makes this easier, because employees know upfront what documentation each claim needs.

How do I pay expense reimbursements?

You can reimburse expenses the old way, with manual paperwork, or the modern way, with an automated system that pays employees directly.

Airwallex handles this end-to-end. Employees submit expenses from their phone, and optical character recognition (OCR) pulls the amount, date, and vendor straight from a photo of the receipt.

Once approved, the reimbursement goes directly to the employee's local bank account, in their own currency, without routing through multiple systems.

If you want a deeper breakdown of how automation removes reimbursement bottlenecks step by step, our guide to expense reimbursement automation in Singapore covers approval workflows, multi-currency payouts, and accounting sync in more detail.

How long do I have to reimburse expenses?

Aim to reimburse out-of-pocket expenses as quickly as your process allows. A slow or unpredictable payout schedule erodes employee trust faster than almost any other part of the expense process, so treat speed here as a priority, not an afterthought.

Do expense reimbursements count as income?

Expense reimbursements aren't considered income when they're made purely to cover costs incurred for business activities. Since the payment simply replaces money the employee already spent from their own pocket, it doesn't add to their taxable income.

Are reimbursed expenses taxable?

In general, reimbursements for actual costs, like flights or hotel bookings, aren't taxable, provided the expense serves a genuine business purpose and the employee has the receipts to prove it.

Per diem allowances work differently. Because a per diem is a fixed daily amount rather than a repayment of an actual cost, it's only non-taxable up to the limit your local tax authority sets.

Amounts paid above that limit are treated as taxable income, so check your tax authority's published rates before setting a per diem policy, to avoid creating an unintended taxable benefit for your team.

Are there alternatives to expense reimbursements?

If chasing receipts and processing claims feels like a hassle, corporate cards offer a way around it. Corporate cards let employees make business purchases with company funds directly, cutting down on how many reimbursement claims you process in the first place.

Virtual cards add more flexibility. Employees can hold them in a digital wallet, and you can issue one to a whole team without needing a physical card on hand.

Cards also let you control spending before it happens. Built-in spend limits and merchant category code (MCC) restrictions block out-of-policy purchases automatically, and your finance team can see every transaction in real time instead of finding out at month-end.

Using Airwallex for expense reimbursement

The easiest reimbursement is the one you never have to process.

Airwallex Corporate Cards, available as physical or virtual cards, let employees pay for business expenses using company funds instead of their own. Every transaction appears in real time, reducing the number of reimbursement claims your finance team needs to handle.

When employees do pay out of pocket, they can submit expenses from their phone, and AI-powered OCR extracts the amount, date and merchant automatically from the receipt. Once approved, reimbursements are paid directly to the employee's local bank account.

Every expense, card transaction and reimbursement then syncs automatically with accounting software such as Xero and NetSuite, giving finance teams an audit trail while reducing manual reconciliation.

Frequently asked questions (FAQs)

Is a reimbursement a refund?

Yes. In a business context, a reimbursement works like a refund: it repays an employee for money they've already spent on a work-related cost. It's compensation for money already spent, not additional income.

How do you record an expense refund in accounting?

Record it by reversing the original expense entry. If the expense was booked as a debit, the refund is posted as a credit to the same account, which cancels out the original outlay.

What's the difference between mileage reimbursement and expense reimbursement?

Mileage reimbursement is a specific type of expense reimbursement: it covers an employee's use of their personal vehicle for work, rather than a general receipt-based claim. Most Singapore companies handle this either by reimbursing actual running costs (fuel, tolls, parking) or by setting a fixed rate per kilometre in their expense policy.

What's the difference between a reimbursement and a stipend or advance?

A reimbursement repays an employee after they've already spent their own money on a work expense. A stipend or advance works the other way around: the company pays the employee first, before the expense happens, so they never need to use personal funds at all.

Can an employer deny a reimbursement claim?

For most expense categories, yes. Reimbursement is generally governed by your company policy, so you can decline a claim that falls outside its rules. There's an exception for specific legally mandated categories: under Ministry of Manpower (MOM) regulations¹, employers must reimburse medical consultation fees when an employee's medical certificate is issued during paid sick leave by a public institution or a company-appointed doctor. That specific category can't be declined.

Do independent contractors receive expense reimbursements?

Not usually in the same way employees do. Contractors typically build their expenses into the rate they invoice for a project, rather than filing a separate reimbursement claim. If you want to reimburse a contractor for a specific cost, set this out clearly in the service agreement rather than relying on your employee reimbursement policy.

Sources:

1. https://www.mom.gov.sg/employment-practices/leave/sick-leave/medical-reimbursements-and-salary