2025 Research: Why outdated reimbursement processes are causing more harm than you think

For a lot of employees, handling work-related expenses isn’t just necessary work admin – it can be a hidden financial strain that quietly chips away at their personal finances. 

Whether it’s a last-minute train ticket to that crucial client meeting, a hotel stay after a long day of travel, or picking up the tab for a business lunch, these costs can really add up. And even though reimbursement is supposed to come through snappily, it often feels slow, confusing, or inconsistent, leaving employees out of pocket and stressed.

Today, and especially for businesses that are growing rapidly, traditional expense systems just don’t cut it anymore. What should be a simple and supportive process can quickly turn into a source of friction – not only affecting employee well-being but also chipping away at trust in their employer. 

For employers, this trust gap can undermine team morale, reduce engagement, and even lead to higher staff turnover. On top of that, inefficient reimbursement processes can create unnecessary administrative burdens, introduce compliance risks, and make it harder to track and control company spending (let alone forecasting!) — all of which can hinder a business’s ability to scale smoothly.

That’s why we decided to dive deep into the state of expense reimbursement in the UK.

In this article, we’ll share our findings, highlight the most common expense challenges, and discuss how smarter spend management solutions, like those offered by Airwallex, can help businesses tackle this growing issue.

About the research

We surveyed 2,000 employees in early 2025 to uncover the real-world impacts of outdated processes – from the emotional toll of fronting costs to the broader effects on productivity and morale.

What are the most common types of employee expenses?

 Employee expenses are business-related costs accrued as part of an employee's role. HMRC considers expenses to be anything incurred 'wholly and exclusively in the performance of the duties of the employment'. Businesses often outline an expenses policy that explains to employees what they can and cannot claim. This helps them be tax-compliant but also minimises the risk of expense claims being rejected.

Of those surveyed, 45% of UK employees use their own money for business-related expenses, with a quarter (24%) accruing costs at least once a month — a figure that jumps to 68% for London-based workers.

For high earners (earning over £100,000 per annum), company cards are most commonly used to cover food and drink expenses (45%). However, when it comes to client entertainment and meetings, 44% of this high-earning group said they have had to use their own money to cover these costs upfront and be reimbursed later.

How much are employees spending on expenses?

 The amount an employee can spend on expenses over the course of a year averages £4,255 (or an average of £355 per month). This rises to £20,000 for almost a third (32%) of those who earn over £100k a year. 

What challenges are there for employees when it comes to expenses and reimbursement?

Based on survey data, there are 10 key issues employees face when it comes to expenses and reimbursement.

 1. 43% of people have faced financial difficulties while waiting to be reimbursed

Waiting for expenses to be paid back can have a number of ramifications for employees. One of which is the prospect of encountering financial difficulties. 43% of surveyed people have faced financial difficulties waiting to be reimbursed, which increases to 66% for those who have to pay for their expenses on a monthly basis. 

 The frequency of financial hardships due to expenses cannot be understated, with 20% saying they have faced financial difficulty due to work event expenses on more than one occasion. Younger workers, in particular, are most acutely affected by the impact of work event expenses, with 59% of participants aged between 18 and 34 also experiencing financial strain from this.

2. High earners are also facing financial difficulties

 Despite being high earners, half (50%) of people earning £100k or more said they faced financial difficulty when waiting for their reimbursements. With almost a third (32%) accruing over £20k in annual expenses, any delays in receiving high-value expenses can cause financial strain irrespective of the employee's higher salary. 

3. Only 30% of people are reimbursed within a week

When it comes to reimbursing expenses, there's a disconnect between expectations and reality. 

39% of people believe they should be reimbursed within a working week if they pay for employee expenses upfront, but only 30% say they are reimbursed in one week. 

 Most expenses (59%) are usually paid back within 2 weeks, but 28% said they have had to wait for 3–4 weeks. This time delay wasn't considered acceptable, with only 22% of people saying this was a reasonable time to wait.

 A quarter of those earning between £10k - £20k per year said they waited over a month to be reimbursed, with only 12% of people in this category thinking this was a reasonable time to wait.

 4. 41% of people have used credit cards to cover their expenses  

When it comes to how employees cover their expenses, 41% of surveyed employees stated that they use their credit cards to pay for their expenses, compared to just 14% who had cash available to cover costs.

Using a credit card to pay for expenses can be risky, however. If a credit card provider charges interest or the employee gets a late payment charge because their reimbursement is not in sync with their balance due date, the employee may be reimbursed less than the amount they paid out. 

5. 45% of employees earning less than £30k are having to borrow money from family and friends to cover expenses

Dipping into savings has become fundamental to covering expenses for those earning less than £30k. This is seen most prominently in the 18-34 age category, with 28% taking money out of their savings and 11% using their overdraft.

However, for employees without access to an overdraft or available savings, help is sought from friends and family, with over a fifth of surveyed participants having to ask others for financial support to cover their expense overheads. 

6. Employees are having to miss work events and quit their roles due to expectations around paying for expenses upfront

When employees are expected to cover their expenses upfront, social and career-ending implications exist. 12% of people said they had missed a company event to avoid paying for expenses upfront, and 13% of those aged between 18 and 34 have had to quit their roles as a result.

7. 41% of employees feel frustrated waiting for reimbursement

For employees who pay expenses monthly, 1 in 5 said they feel frustrated while waiting to be reimbursed. This figure shoots up to 41% for those earning less than £30k a year, with 42% expressing worry while waiting.

8. Londoners are expected to pay the most employee expenses upfront

 Regional variations exist when it comes to expectations around expenses. Unlike in other areas, 68% of Londoners stated they were expected to cover their costs upfront.

On the other hand, however, 76% of employees in the South West said, "I don't ever pay for business expenses with my own money," with 69% of employees in Wales agreeing with this statement.

9. North East workers are facing the most financial strain from expenses

For employees in the North East, 64% said they had faced difficulties relating to expenses. Interestingly, this is closely followed by London-based employees at 59% – something that intersects with the point above regarding the expectations that exist for Londoners to pay upfront for their costs.

10. 50% of employees want a better reimbursement system in place  

Participants also thought that better methods need to be in place to pay employees back. Over 50% of people said there needs to be a better way to get their money reimbursed, and 37% of the participants surveyed believe that their current expense reimbursement software is not fit for purpose.

This is even more prominent among high earners, with 75% wishing for better expense reimbursement software to be in place.

So, what can businesses do to address the pain points employees and employers feel?

How Airwallex offers a solution to solve the reimbursement pain for both employees and employers

At Airwallex, problems related to expenses and reimbursement can be remedied – whether it's Corporate Cards for business expenses or reimbursement/employee cards, Airwallex can address your business's spend management challenges.

We're able to offer this thanks to our in-house capability to efficiently collect reconciliation information from our underlying proprietary financial infrastructure, which seamlessly interlinks payments data with the WebApp.

Here are the top benefits Airwallex can offer:

Virtual and physical cards: Giving employees flexibility in how they pay for expenses allows them to complete their roles without having to devote time to managing them. Corporate Cards not only remove the need for reimbursement but also offer speed, visibility, and control, meaning both employees and employers are kept informed at all stages.

Instant employee reimbursements: Paying employees back in a timely manner relieves the stress and financial burden some may encounter. It allows your business to save time on financial admin and ensures accuracy when it comes to up-to-date cash flow metrics.

Automated Expense Management: Integration with accounting software such as Xero, QuickBooks, Netsuite, and many more, eliminates the manual labour of tracking, approving, and reconciling expenses, meaning your business saves time and resources on automated activities.

Multi-currency payments: For global companies, Airwallex business accounts offer competitive exchange rates and a range of currency options – a perfect fit for employees with overseas expenses. Our cards are multi-currency, which means employees can spend in the currency of the country they’re in without having foreign exchange charges added to their transactions. The spend pulls directly from the corresponding currency account, or auto-converts at the interbank rate where the currency is not held.

There are also benefits for employers. In addition to being quick and speedy, we use the best available foreign exchange rates (known as the interbank rate). There are also no hidden international transaction fees, which offers your business transparency on how much is being paid out at any given time.

Flexible spending controls: At Airwallex, we understand that different roles require different parameters on what they can and can't spend on work expenses. Spending limits can be arranged, and real-time tracking means you can monitor overspending and have up-to-date figures that shape your spend management objectives.

Sometimes, finance teams can feel cautious or worried about using Corporate Cards, as there is a risk of losing control over employee spending.

Airwallex takes care of these concerns by offering wide-ranging flexibility on how cards are used, as we are the card issuer. This can include setting up cards quickly and freezing them. Finance teams have the flexibility to set spending limits on an individual and operational basis and can choose how the cards can be used and where payments can be made. Real-time tracking means overspending can be monitored, and up-to-date figures are available that can shape your business’s spend management objectives.