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.
If an organization wanted to reimburse the employees for Tax benefit on certain categories, it can create an category (of the same name as given in salary template) in reimbursement, define it's limits, make it taxable and select the payout mode as none. Now the employee can simply apply for the reimbursement, in the selected category from the main panel. Once the admin approves the it, the amount gets added in the respective category of the income tax declaration of the respective employee.
Example: If an organization wanted to reimburse the employees on the telephone bills, they can simply create a category (of the same name as given in salary template) in reimbursement called "telephone allowance". Employees can declare the amount to be reimbursed under the same category. After approval by the admin, the amount will get summed up under the same "telephone allowance" section in the employee's income tax declaration.
Refer to the following steps to manage the categories for reimbursement:
- Navigate to: Control Panel -> Payroll -> Reimbursement
- Click on the Categories button (given in the navigation bar), a new page opens up showing fields to manage the categories
- Select the Component Type (Medical, Conveyance, LTA, Taxable, Non Taxable)
- Enter the Name of the reimbursement category
- Enter the Description for the reimbursement
- Enter the Financial Year for which the reimbursement is to be done
- Pro Rata basis: Allows you to reimburse the amount in pro rata basis depending on the exempted limit specified for the category.
- Is Elapsable: Enabling the box will allow you to make the not claimed reimbursement to be elapsed at the end of the financial year.
- Is CTC: Enabling the reimbursement amount to be CTC component in case of all the required documents submitted by the employee and verified by the employer. The employee can view the reimbursement in the CTC by clicking on Compensation->My Compensation on Main Panel.
- Payment Mode: Select the payment mode as None
- (None: Enabling this option will allow the reimbursement to be made but no payment will be done to the employee)
- Monthly Limit: The monthly limit for the reimbursement for the category (month wise).
- Yearly Limit: The yearly limit is the limit till which the reimbursement can be made for the category. The yearly limit has the following options available:
- Enabled: Enabling the option will allow viewing the monthly limit visible on his portal in reimbursement section.
- Allow self-declaration: Enabling this option will allow the employee to edit the reimbursement value against the category from the Main Panel.
- Show in Investment Declaration: Enabling this option will display the reimbursement category in the Investment declaration for the employee.
The entry will appear in the table given below on the same page. Employees can now apply for the reimbursement under the same category.
Applying for reimbursement amount:
- Navigate to: Main Panel -> Reimbursement
- Enter the Title, Description
- Select the Category (in our case, telephone allowance)
- Enter the Amount and upload the receipt in Upload Document field
- Click on Apply button to apply for reimbursement, option of Reset is also available
The applied entry wil be sent to the admin. Once the admin approves the it, the amount gets added in the respective category of the income tax declaration of the respective employee (Control panel -> Payroll -> Investment) .