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Reimbursements are a special set of components that are part of the payroll. This is typically introduced in the payroll to save tax. Tax is to be paid by every employee to the government. The amount of tax is based on the income earned by the employee.

As the word suggests, reimbursements are money paid to you for some money that you have already spent. For example, a common reimbursement item is Medical Reimbursement. This indicates that if you spend some money on medical expenses (medicines, doctor charges, etc), then the company will reimburse (pay) you the amount spent by you. Another common reimbursement is LTA (Leave Travel Allowance).

All reimbursements are subject to upper limits. This means is that you can claim (request for payment) reimbursements only up to a certain limit. If your Medical Reimbursement limit is Rs.15,000 then you can only claim up to Rs.15,000.


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