A new study has found a third (37%) of employees paying for company expenses impacts their mental health and 77% worrying about money distracts them at work.
The report, by payroll provider PayCaptain, also found one in four workers (23%) say work expenses put pressure on their ability to pay for essential bills.
Over a third (37%) are left out of pocket after having expenses reimbursed.
The findings underline the increasing issue of in-work poverty in the UK, which has grown by 1.5 million between 2010 and 2022.
More on expenses:
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How the term ‘expenses’ is open to misinterpretation
Work expenses driving employees into debt
Simon Bocca, CEO of PayCaptain said although many HR teams are providing financial and mental wellbeing support, the detrimental effects of work expenses can be a hidden issue.
Speaking to HR magazine, he said: “It really shows up the requirement for employers to forensically review every element of an employee’s experience of working for them and what changes they can make to better support them.”
On average, British workers covered expenses up to five times a month, equating to an additional £273 in outgoings for expenses.
Claire Williams, chief people officer at HR software provider Ciphr, said employers who do not address this issue could risk losing employees, particularly during a cost of living crisis.
Speaking to HR magazine, she said: “This could force them to look elsewhere for better paid jobs or for roles that don’t require them to pay and reclaim work-related expenses from their own back pocket.
“Cost of living increases are impacting everyone – but some employees will be struggling more than others.”
Williams said employers should review their expense policies, in response to financial pressures.
She said: “Organisations should review their expense policies regularly to ensure they are fair and do not place an undue burden on employees.
“For example, employees could be provided with a company credit card or offered reimbursement in a timely manner – weekly instead of monthly perhaps – to help reduce their financial stress.”
Bocca added: “Covering expenses and then having to wait until payday to be reimbursed is having a huge negative impact on employee’s welfare and it is completely within the employer’s control to change that.”
