Employee Out-of-Pocket Expense

How employee out-of-pocket expenses are handled is a policy matter of each congregation and should be established by the church council. The treasurer should have a good understanding of this policy and be aware that such expenses have a direct relationship to the annual budget of the congregation.

Generally, reimbursements are taxable income unless they are made under an accountable plan as defined by the IRS and documented under IRS regulations. For more information, please consult IRS publication 463.