What's the difference between an incentive and an expense reimbursement?

During a payroll, incentives and expenses are treated differently.

Incentives

An incentive is a form of additional compensation provided to employees to motivate or reward them for achieving specific goals or performance targets. Incentives can take various forms, such as bonuses, commissions, profit-sharing, stock options, or other monetary or non-monetary rewards. They are typically designed to encourage and recognize exceptional performance, productivity, or contribution to the organization.

Expense Reimbursement

An expense reimbursement is a repayment for work-related expenses an employee incur. Examples of expenses that can be reimbursed include travel, accommodation, meals, and other business costs. The Customer reviews reimbursement requests submitted by employees. If the expense request is approved, the employee is reimbursed. 

If employees submit expenses for reimbursement, the amount will not be taxed. However, if it is paid as an incentive, the amount will be taxed. As the Customer, if you want to pay it as an incentive, you can add it on the platform as a Net payment. Our system will gross up the amount and include the tax amount in the reimbursement, so that the taxes are not borne by the employee.