Reimbursement is the act of compensating someone for an out-of-pocket expense by giving them an amount of money equal to what was spent. The reimbursement as per the organization policy can be paid as a fixed amount every month, or the claimed amount by the employee.
Firstly, you need to make sure the Salary template does have the component defined with the same name as the reimbursement category.
Next, add the component in the Salary template, e.g In case a fixed (INR 2000/- pm) reimbursement for Fuel allowance needs to be given, you will create a component with the name Fuel Allowance, and defined the value as 2000 with pay frequency as Monthly.
Now, create the reimbursement category with the same name i.e Fuel allowance and entitle it to the employees.
The reimbursement would be paid to the employee now on monthly basis, and the bills against the same can be uploaded by the employee
The payroll when processed will provide the employee the amount defined against the reimbursement component defined in the salary template, however, in case the employee claims the reimbursement against that category, the admin needs to approve the same.
In this case, the employee will receive the reimbursement as a non-taxable amount, if approved by the Admin.
An important point to note, in order to allow the exemption against the reimbursement component, you will have to make the reimbursement category, as taxable and enable the option Show in Investment Declaration.
Once the admin approves the claim, the employee is liable for the exemptions.