Template · Finance
Expense reimbursement policy
A plain policy for paying back staff and volunteers for approved costs, built on the IRS accountable-plan rules: receipts on time, excess returned.
The Word file opens in Microsoft Word, Google Docs, Pages and LibreOffice. Reviewed October 21, 2026.
An expense reimbursement policy says which costs your charity will pay back, how people claim them and how quickly. It protects the charity's money, and it protects the people who spend their own money on its behalf.
This template follows the IRS rules for an accountable plan, set out in Publication 15. Under an accountable plan, the person must have paid the expenses while doing the work, must substantiate them (show what was spent, with receipts) within a reasonable period, and must return any amount paid beyond what they spent. Publication 15 says payments under an accountable plan aren't wages and aren't subject to income, Social Security, Medicare or federal unemployment taxes. Amounts that aren't substantiated or returned on time are treated as paid under a nonaccountable plan, which makes them wages.
Publication 15 says a reasonable period generally means an advance given within 30 days of the expense, expenses accounted for within 60 days, and any extra returned within 120 days. This template uses those periods.
The accountable plan rules are written for employees. Volunteers aren't employees, but using the same rules for them keeps your records clean. Once a volunteer is reimbursed for a cost, they can't also deduct it; IRS Publication 526 says volunteers can deduct only unreimbursed expenses. See our guide to volunteer expenses.
How to adapt it
- Choose who approves. Name a role, not a person. The approver should never approve their own claim; the chair or treasurer approves the director's claims. See financial controls.
- Set your spending limits. Fill in the amount above which people need approval before they spend. Pick a figure that fits your budget.
- Mileage. The template uses the IRS standard mileage rate in effect on the date of travel, found on the IRS standard mileage rates page. Decide whether you'll pay mileage to volunteers, and say so. Paying volunteers more than the 14-cent charitable mileage rate may have tax consequences for them, so get advice before you choose the business rate for volunteers.
- List anything you never pay for. Alcohol, fines and personal items are common examples.
- Adopt it by board vote and record the vote in the minutes. Review it each year.
Preview
Expense reimbursement policy
[ORGANIZATION NAME]
Adopted by the Board of Directors on [DATE]
1. Purpose
This policy explains how [ORGANIZATION NAME] reimburses employees and volunteers for reasonable expenses they pay while carrying out the organization's work. It is intended to meet the requirements of an accountable plan as described by the IRS.
2. Who this policy covers
This policy covers employees, board members and volunteers of [ORGANIZATION NAME] who pay approved expenses on its behalf.
3. What we reimburse
We reimburse expenses that are:
- reasonable in amount,
- paid while doing work for [ORGANIZATION NAME], and
- approved in advance when required by section 5.
Examples include supplies bought for programs, postage, approved travel, registration for approved training, and mileage for approved trips.
4. What we do not reimburse
We do not reimburse personal expenses, commuting between home and a regular place of work, fines or penalties, alcohol, [OTHER ITEMS], or any expense without a receipt except as allowed in section 6.
5. Approval before spending
Any single expense over $[AMOUNT] needs approval from [APPROVER ROLE] before it is spent. Travel away from home always needs approval in advance. No one may approve their own expenses. Expenses of the [EXECUTIVE DIRECTOR / CHAIR] are approved by the [TREASURER / CHAIR].
6. How to claim
- Complete the expense claim form, listing the date, amount and purpose of each expense.
- Attach an itemized receipt for each expense. If a receipt is lost, attach a signed note explaining the expense, the amount and why there is no receipt. Missing-receipt notes are allowed for expenses up to $[AMOUNT] only.
- Submit the claim to [APPROVER ROLE] within 60 days of paying the expense.
- Claims submitted later than 60 days may be refused.
7. Mileage
When a person uses their own vehicle for approved [ORGANIZATION NAME] travel, we reimburse at the IRS standard mileage rate for business use in effect on the date of travel, published at irs.gov. [OPTIONAL: VOLUNTEERS ARE REIMBURSED AT THE SAME RATE / VOLUNTEERS ARE NOT REIMBURSED FOR MILEAGE.] Parking fees and tolls are reimbursed with receipts. The claim must include a mileage log showing the date, starting point, destination, purpose and miles driven.
8. Advances
[ORGANIZATION NAME] may advance money for an approved expense, no earlier than 30 days before the expense is expected. Within 60 days of the expense, the person must submit receipts for the advance. Any money not spent must be returned within 120 days of the expense.
9. Payment
Approved claims are paid by [CHECK / DIRECT DEPOSIT] within [NUMBER] days of approval. Reimbursements are recorded in the organization's books as the type of expense they cover.
10. Amounts not substantiated or returned
If expenses are not substantiated, or excess advances are not returned, within the periods in this policy, [ORGANIZATION NAME] will treat the unsupported amount as required by IRS rules. For employees, this may mean reporting it as wages.
11. Records
The [TREASURER / BOOKKEEPER] keeps claim forms, receipts and mileage logs as required by our document retention policy.
12. Review
The Board reviews this policy every [NUMBER] year(s).
Approved by: [NAME], [TITLE] Date: [DATE]
General information. Not legal, tax or financial advice. Rules change and every situation is different, so check the official sources and talk to a qualified professional before you act. More about this.
Keep going
- GuideAccepting donated goods, services and stockWhich noncash gifts to accept, why valuing them is the donor's job, what your charity signs and files, and how to handle vehicles and stock.
- GuideAudits, reviews and compilationsThe difference between an audit, a review and a compilation, when a state or federal funder requires one, and how to get ready without panic.
- Founder pathwayRunning day-to-day operationsOpen a bank account, keep simple books, get insured, treat volunteers and workers fairly, protect people's data and adopt the core policies.
- Founder toolFirst-year budget builderAdd up the real costs of year one, and download it as a spreadsheet.
Sources
Checked on October 21, 2026. Rules and fees change, so follow the links for the current version.
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