The receipt is in before it fades
Employees photograph the receipt on their phone right after they buy something, so the proof is attached to the claim instead of crumpled in a car.
Expenses
Expense reimbursement software that pays people back on payday
Workzenly is expense reimbursement software for teams that buy things out of pocket now and then. Employees photograph the receipt, pick a category and send it from their phone. Managers approve. Approved claims are paid with the next paycheck, on their own line, separate from wages.
- Receipt photo from a phone
- Manager approval
- Paid with the next paycheck
Expense approvals
Northfield Coffee · Austin, TX · Wed, Nov 11
3Waiting$69.65
$86.00Approved1 claim
$155.65This pay periodNov 1–14
Nov 20Next paycheckFriday
| Employee | Category | Date | Amount | Status |
|---|---|---|---|---|
| JLJordan Lee | Café supplies | Nov 10 | $23.47 | Waiting |
| MTMaya Torres | Office supplies | Nov 10 | $31.18 | Waiting |
| ABAisha Brown | Training | Nov 11 | $15.00 | Waiting |
| ECEmily Carter | Kitchen supplies | Nov 9 | $86.00 | Approved |
By categoryNov 1–14
Kitchen supplies$86.00
Office supplies$31.18
Café supplies$23.47
Training$15.00
3 claims waiting, $69.65 in total
Receipts attached · approved claims join the Nov 20 paycheckBuilt for teams that work in shifts
- Restaurants and cafés
- Retail stores
- Clinics
- Home care
- Job sites
- Warehouses
- Offices
A receipt folded into an apron pocket, a text to the manager, and the money shows up a month later, if anyone remembers.
Turn every receipt into a claim the day it happens
When an employee runs out for sheet pans or receipt paper, the receipt goes into the app before it gets lost. The manager approves it in the same place, and payroll pays it back on the next paycheck. Nobody keeps an envelope of receipts or a reimbursement spreadsheet.
What changes in the first pay period
Receipts captured, claims approved, money back on payday
Managers approve with the receipt in view
Each claim shows the photo, the amount, the category and the employee’s note. Managers approve from a phone between rushes, or from a laptop.
Paid with the next paycheck
Approved claims flow into payroll. No separate checks, no petty cash, and no second bank transfer to remember.
Kept apart from wages
The reimbursement prints on the pay stub as its own line, so the employee sees the money came back and payroll keeps it out of taxable wages.
How it works
How the employee expense app works, from receipt to paycheck
Four steps, one record. The photo the employee takes at the store is the same receipt the manager approves and the same amount on the pay stub.
Photograph the receipt
The employee opens the Workzenly app, takes a picture of the receipt and types the amount. It works like a receipt tracking app that already knows who you work for.
- The receipt photo stays attached to the claim
- A short note says what it was for
- The same app they use to clock in and see pay stubs
New expense
Emily Carter
EASTSIDE RESTAURANT SUPPLY
Austin, TX
11/09/2026 2:41 PM
SHEET PAN 4 @ 12.5050.00
DELI CONT 32OZ CS18.50
NITRILE GLOVES L10.95
SUBTOTAL79.45
TAX 8.25%6.55
TOTAL86.00
Amount$86.00
DateMon, Nov 9
Photo attached · next: pick a category
Pick a category and send
A short list of categories keeps every claim in the right bucket, so you can see what the kitchen spent on supplies this month without sorting receipts by hand.
- One tap to choose, one tap to send
- The note travels with the claim to the manager
- Employees see the status of every claim they sent
$86.00 · Mon, Nov 9
Choose a category
Kitchen supplies
Pans, containers, glovesCafé supplies
Milk, cups, syrupsOffice supplies
Paper, receipt rolls, inkTraining
Courses and food handler cardsPhone and internet
Work share of a personal billNoteWeekend prep, pans ran short
Not sent yet
Approve with the receipt in front of you
The manager sees the photo next to the amount, category and note. If it looks right, approve. If the receipt is missing or unclear, send it back with a comment.
- Approve one claim or the whole queue
- Approve from a phone or a laptop
- Who approved, and when, is kept on the claim
CORNER GROCERY
Austin, TX
11/10/2026 6:12 AM
WHOLE MILK GAL 3 @ 4.6914.07
OAT MILK 64OZ 2 @ 4.709.40
TOTAL23.47
Amount
Paid by JordanCategory
Café suppliesNote
Milk delivery late, ran to the store before openStatus
Sent Tue, Nov 10, 6:20 AMApprove to pay on Fri, Nov 20
Paid as a reimbursement line, not wagesPaid on the next pay stub
Approved claims move into payroll with the approved hours, overtime and PTO. On payday, the employee opens the app and sees the reimbursement on its own line.
- One deposit, wages and reimbursement together
- Reimbursement shown separately from wages
- The stub is in the employee app on payday
| Earnings | Hours | Rate | Current |
|---|---|---|---|
| Regular | 72.00 | $19.00 | $1,368.00 |
| Overtime | 6.00 | $28.50 | $171.00 |
| PTO, Nov 6 | 8.00 | $19.00 | $152.00 |
| Expense reimbursementKitchen supplies · Nov 9 · not taxed | – | – | $86.00 |
| Gross pay | $1,777.00 |
Wages $1,691.00 · reimbursement $86.00
Taxes are worked out on wages onlyA record that holds up
Every claim keeps its receipt, approval and payday
Reimbursements are only tax-free when they are backed up. Each Workzenly claim keeps the receipt photo, what it was for, who approved it and the paycheck it was paid on, in one history you can pull up when your accountant asks.
- Receipt photo and note stored with the claim
- Approver name and time recorded
- Linked to the pay run that paid it
Claim sent with receipt photo
Mon, Nov 9, 3:05 PM · Kitchen suppliesNote: “Weekend prep, pans ran short”
Added by EmilyApproved by Marcus (manager)
Tue, Nov 10, 8:41 AM · from phoneAdded to pay run Nov 1–14
Reimbursement line, separate from wagesPaid with paycheck
Fri, Nov 20For managers on the floor
Approve claims from your phone between rushes
Managers rarely sit at a desk. The expense reimbursement app puts waiting claims on the manager’s phone next to timesheets and time off requests, so a $23 milk run gets approved in seconds instead of sitting in a pile until the end of the month.
- Waiting claims listed with amounts and categories
- Tap a claim to see the receipt
- Send back with a comment if something is missing
Waiting for you
3 expense claims
Jordan Lee · $23.47
Café supplies · Nov 10Maya Torres · $31.18
Office supplies · Nov 10Aisha Brown · $15.00
Training · Nov 11Total waiting$69.65
Approved claims are paid Fri, Nov 20
Phones, internet and other shared costs
Handle the costs people forget to ask for
When staff use their own phone for the time clock app or work from home part of the week, some states expect you to cover a share of the bill. Employees can send that as a claim with a copy of the bill, and your policy says what share you pay.
- Attach a photo of the bill like any receipt
- Note the policy amount on the claim
- Paid with the next paycheck like everything else
MOBILE SERVICE BILL
Statement Oct 2026
PLAN, 1 LINE65.00
TAXES AND FEES7.42
AMOUNT DUE72.42
Claimed
Work share per expense policyNote
Own phone used for clock-in and shift swapsStatus
Sent Wed, Nov 11Pays on Fri, Nov 20 if approved
Reimbursement line, separate from wagesWho uses it
One expense claim, four people who rely on it
Role
Employees
Replaces
Handing over crumpled receipts and waiting
They use it to
Photograph a receipt, pick a category, send it and see when it will be paid
What they notice
Their money back on the next payday
Role
Managers
Replaces
An envelope of receipts in the office drawer
They use it to
Approve claims from a phone with the receipt in view, or send them back
What they notice
No more “did you get my receipt?” texts
Role
Payroll
Replaces
Typing reimbursements in as a manual adjustment
They use it to
Pay approved claims with the pay run, as a line separate from wages
What they notice
Reimbursements that never end up taxed by mistake
Role
Owners
Replaces
Finding out what was spent from the bank statement
They use it to
See spending by category and pull up any receipt when the accountant asks
What they notice
Out-of-pocket spending they can actually see
Access you control
Everyone sees what they need, and nothing else
Employees see their own
Each person sees their own claims, receipts and pay stubs, never a coworker’s.
Managers approve their team
Managers review and approve claims from the people they manage, alongside their team’s shifts and time off.
Pay stays with payroll
Pay rates and pay stubs are visible only to the people you give payroll access to.
Connected
Expenses that land where the rest of pay does
Payroll
Approved hours, overtime, PTO and expenses become one pay run.
Payroll →Employee app
Send a receipt, clock in, swap a shift and check pay stubs in one app.
Employee app →Time and attendance
Approved hours flow into the same pay run as the reimbursements.
Time and attendance →Time clock app
Clock in and out from a phone, with GPS and geofencing.
Time clock →HR documents
Keep your handbook and expense policy where every employee can find them.
HR documents →PTO tracking
Time off requests and balances that also land in payroll.
PTO →Pay back every receipt on the next payday
See a claim go from a phone photo to a pay stub line. We set up a demo workspace with your company name before the call.
The buyer’s guide to expense reimbursement software
Most small employers handle reimbursements with a shoebox, a spreadsheet or a petty cash drawer. That works until someone’s receipt goes missing, a reimbursement is taxed as wages by mistake, or an employee in California asks why they were never paid back for their phone. This guide covers what expense reimbursement software does, the IRS and wage rules behind it, a sample policy and how to choose a tool.
What expense reimbursement software does
Expense reimbursement software collects work costs that employees paid with their own money, keeps the proof, routes each claim to someone who can approve it and pays it back. Larger finance tools, often sold as expense report software, add corporate cards, travel booking and accounting exports. Hourly teams usually need the simple part: a quick way to send a receipt and a reliable way to get paid back.
For a café or a clinic, that means a milk run before open, a box of gloves or a food handler course. The amounts are small, but they matter to someone earning $18 an hour.
IRS accountable plan rules
The tax treatment of a reimbursement depends on how you pay it. According to IRS Publication 15, amounts paid under an accountable plan are not wages and are not subject to income tax withholding, Social Security, Medicare or FUTA. To be an accountable plan, your arrangement must require employees to meet all three of these rules:
| Rule | What it means | Safe harbor timing |
|---|---|---|
| Business connection | The expense was paid or incurred while working for you, and the payment is not money that would otherwise have been paid as wages. | Advances paid within 30 days of the expense |
| Substantiation | The employee accounts for the expense to you, usually with a receipt and what it was for. | Within 60 days after the expense |
| Return of excess | Any advance or allowance beyond the substantiated amount comes back to you. | Within 120 days after the expense |
The IRS says these periods depend on the facts. The timings above are what it generally treats as reasonable; a quarterly statement asking employees to account for or return outstanding amounts within 120 days also works. If an employee does not substantiate a cost or return the excess, that amount is treated as paid under a nonaccountable plan and becomes taxable wages. That is why the receipt photo matters: it is the substantiation. Our guide on how to read a pay stub shows how Emily’s $86.00 stays out of taxable wages.
Federal wage rules: “free and clear”
Federal law does not require you to reimburse every work cost. It does require that wages be paid “free and clear.” Under 29 CFR 531.35, if you require employees to provide tools of the trade, there is a violation when the cost of those tools cuts into the minimum or overtime wages the Fair Labor Standards Act requires.
An example: an employee earns the federal minimum of $7.25 an hour for 30 hours, or $217.50. If you require $40 of tools and don’t pay it back, they keep $177.50, about $5.92 an hour. That is below the minimum wage. At $17 or more an hour the federal floor holds, but state law may still require repayment.
State reimbursement laws
Some states go well beyond the federal rule. Two you will hear about most:
- California. Labor Code section 2802 requires employers to indemnify employees for all necessary expenditures or losses incurred in direct consequence of their job duties. California courts have applied it to the work use of personal cell phones, holding that the employer owes a reasonable percentage of the bill even on an unlimited plan. Awards for unpaid reimbursements also carry interest from the date the employee paid the cost.
- Illinois. Section 9.5 of the Illinois Wage Payment and Collection Act (820 ILCS 115/9.5) requires reimbursement of necessary expenditures that are required for the job and primarily benefit the employer, when the employer authorized or required them. Employers may set written guidelines and limits, but a policy cannot provide for no or only trivial reimbursement. Employees generally submit expenses within 30 days, unless your written policy allows longer.
A handful of other states and some cities have their own reimbursement rules, so check yours before you write a policy. For phones used to clock in, our guide to the GPS time clock app covers what California and Illinois expect. For home internet and office costs, see the reimbursement section of our hybrid work schedule guide.
This guide is general information, not legal advice. Tax and reimbursement rules change, so check with the IRS, your state labor department, a tax professional or an employment lawyer for your situation.
A sample expense policy outline
Your expense policy is what makes the plan accountable and what tells employees what they can buy. Keep it short enough that people read it. A one-page outline:
- Purpose. We pay back reasonable, necessary costs employees pay while working for us.
- Who can approve. Your direct manager approves claims. Ask before any single purchase over [amount].
- What we cover. Supplies for your shift, required training and certifications, [share] of a personal phone bill if you use your phone for work, and other costs your manager approves in advance.
- What we don’t cover. Personal items, commuting to your regular workplace, fines and anything not approved.
- How to claim. Photograph the receipt, pick a category, add a note on what it was for and send it in the Workzenly app within [30] days.
- Missing receipts. Tell your manager in writing what you bought, when, where and why.
- Advances. Account for any advance within 60 days and return what you didn’t spend within 120 days.
- When you get paid. Approved claims are paid with the next paycheck as a reimbursement, separate from wages.
Put the policy in your employee handbook so new hires read it during onboarding.
Paying reimbursements with payroll
You can pay reimbursements by check, bank transfer, petty cash or with the regular paycheck. The paycheck is easiest to track, because the money arrives on a date employees know. The catch: payroll must treat it as a reimbursement. Type $86.00 in as a bonus and it gets taxed.
In Workzenly, approved claims flow into payroll as a reimbursement line. Emily Carter’s Nov 1–14 stub shows 72 regular hours ($1,368.00), 6 overtime hours at $28.50 ($171.00), 8 PTO hours ($152.00) and the $86.00 reimbursement, for $1,777.00 gross. Taxes are worked out on her $1,691.00 of wages, not on the reimbursement. Our guide on how to process payroll walks through the rest of the pay run, and the pay stub templates show where a reimbursement line sits if you build stubs by hand.
How to choose expense reimbursement software
Run one real claim through every tool you are considering. Take a recent receipt and follow it from the employee’s phone to the pay stub. Then ask:
- How fast can an employee send a claim? Over a minute on a phone, and receipts pile up in pockets again.
- Does the receipt stay with the claim? You need it for substantiation.
- Can managers approve from a phone? Shift managers are rarely at a desk.
- How does the money get back? On the paycheck or by separate payment, and kept apart from wages?
- Is it one more app? A receipt tool separate from the time clock and pay stubs is one more login.
Workzenly is built for the simple case: employees who pay out of pocket now and then and want the money back on payday. If you also need corporate cards or travel booking, ask about it on the demo call. If you are still picking a payroll provider, our neutral list of the best payroll services for small business compares the main options. When you want to see a claim go from receipt to pay stub, book a demo and we will set up a workspace with your company name before the call.
FAQ
Questions about expense reimbursement software
Something else on your mind? Write to [email protected].
What is expense reimbursement software?
Expense reimbursement software lets employees submit work costs they paid themselves, with a photo of the receipt, and lets a manager approve or send back each claim. Approved claims are then paid back. In Workzenly, employees photograph the receipt, pick a category and send it from their phone, and approved claims are paid with the next paycheck.
Are expense reimbursements taxable income?
Not when they are paid under an accountable plan. The IRS says amounts paid under an accountable plan are not wages and are exempt from income tax withholding, Social Security, Medicare and FUTA. The plan must require a business connection, substantiation within a reasonable period and the return of any excess. Reimbursements that fail those rules are treated as wages.
Do employers have to reimburse employee expenses?
Federal law requires it only when an unreimbursed cost the employer requires, such as tools of the trade, would push pay below the minimum wage or required overtime. Some states go further. California Labor Code section 2802 and section 9.5 of the Illinois Wage Payment and Collection Act require employers to reimburse necessary work expenses.
How do employees submit an expense in Workzenly?
In the Workzenly app on their phone. They photograph the receipt, enter the amount, pick a category, add a short note and tap send. Their manager sees the claim with the receipt photo attached and can approve it from a phone or a laptop.
When do employees get their money back?
With the next paycheck. Approved claims flow into payroll and appear on the pay stub as a reimbursement line, separate from wages. At Northfield Coffee, Emily Carter's $86.00 kitchen supply receipt was approved during the November 1 to 14 pay period and paid on November 20 alongside her hours.
What records should we keep for reimbursements?
Keep the receipt or other proof of what was bought, when, how much and why, plus the approval and the payment. The IRS tells employers to keep records of expense reimbursements, including substantiation. Workzenly keeps the receipt photo, category, note, approval and the paycheck it was paid on together with each claim.