Reimbursements

Reimbursing church employees/volunteers for out-of-pocket expenses requires that careful records are kept. This also permits the church to claim the GST/HST rebate on such reimbursed expenses.

All reimbursement amounts paid to employees/volunteers to cover church ministry expenses must be reasonable, properly documented and approved by the leader responsible. The amounts paid will likely be treated as income and be subject to CPP, EI, and income tax if they are not reasonable or properly handled (CCCC Charities Handbook).

Ensure that staff/volunteers always provide clear accurate documentation for all reimbursements before any cheques are to be issued. No receipt = No reimbursement is a good rule to initiate.

It is important that you have a system to store/record receipts/reimbursements in case you are ever audited by the CRA.  You may want to consider using reimbursement forms for ALL expenses which indicate (see sample in Resources below):

  • ministry name and account code
  • date of receipt
  • purpose
  • initial/signature of ministry leader responsible for that account;  NOTE:  No one should ‘self approve’ their own expenses or that of family members
  • Date/Number of reimbursement cheque

You can also ask that ministry expenses be purchased on a separate receipt (not combined with personal items) which will make it easier to process and use for GST/HST rebates.

If staff/volunteers are reimbursing mileage, then make sure they keep/submit proper records of their trips. Ask them to think before they drive: What is the most cost effective way to travel?  Is it cheaper to rent a car with unlimited mileage?

If your church is struggling financially, then you can ask that ministry leaders limit their discretionary expenditures (meals, books, etc.) until you are in a better position.

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