reimbursement
Definition
Reimbursement means paying someone back for money they already spent on your behalf. If an employee buys supplies for your business out of their own pocket, you owe them reimbursement for that exact amount. It is not a bonus or extra pay, just a repayment of what they were already out of pocket.
Example
Your sales rep drives her personal car to visit clients and pays $200 in gas, so you reimburse her $200 to cover that business expense.
Watch Out
Keep receipts and a clear written policy for what expenses qualify for reimbursement, because without documentation the IRS may treat those payments as taxable income to your employees.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.