How to give business credit cards to employees

The math on employee expense reimbursement doesn't work at scale. A single expense report costs companies roughly $58 to process when you factor in employee time, manager reviews, and accounting overhead. Multiply that across every business dinner, software subscription, and office supply run, and you're looking at thousands of dollars in administrative drag each year. That's money spent pushing paper rather than building products or serving customers.

The expense reporting process also creates cash flow strain on employees.Instead of fronting expenses and chasing reimbursements, employees can use company funds from the moment of purchase with their employee credit card. Finance teams would see transactions as they happen rather than weeks later.

The benefits of business credit cards include spending controls that personal card reimbursement simply can't match, from category restrictions that prevent charges at prohibited merchants to transaction limits that catch unusual spending before it escalates. Real time alerts flag potential issues immediately rather than during end of month expense reconciliation when the damage is already done.

The terminology around business credit card options gets confusing because people use terms interchangeably when they actually mean different things. When someone says "corporate card," they might mean a true corporate card program, a small business card with employee cards attached, or simply any card used for business purposes. These distinctions matter because they determine who's liable for charges, whether employees' personal credit gets affected, and what controls you can put in place.

Authorized users on business credit cards

The simplest approach is adding employees as authorized users on an existing business credit card. The primary cardholder, usually the business owner or a financial officer, remains fully responsible for all charges while employees get cards with their names on them and can make purchases up to whatever limits you set with the card issuer.

This works well for very small teams where trust is high and spending is limited, typically companies under ten employees where the owner knows everyone personally. The downside is that authorized user activity may appear on employees' personal credit reports depending on the issuer, and your controls are limited to whatever the card company offers, which often isn't much. You're also concentrating all spending on a single account, which creates both fraud risk and credit utilization concerns as your team grows.

Small business credit cards

Small business credit cards are what most companies under 50 employees actually use. These cards are designed for businesses rather than individuals, often come with employee card options built in, and typically require a personal guarantee from the business owner.

The guarantee means your personal credit is on the hook if the business can't pay, which is a significant consideration for any founder or owner thinking about scaling their team's spending power. Spend management features tend to be more sophisticated than consumer cards but less granular than true corporate programs, giving you basic category controls and spending limits without the full policy enforcement capabilities larger companies need. Many small business cards offer solid rewards programs and integrate with popular accounting software, making them a practical middle ground for growing companies that want better visibility without enterprise complexity.

Corporate credit card programs

Corporate credit card programs are designed for companies with established revenue and regular business spending. Most issuers require minimum annual revenue thresholds and a set number of cardholders before they'll even consider an application, which is why these programs are most common among mid-size and larger companies. In return, corporate programs offer the most sophisticated controls available, including dedicated account management, custom reporting capabilities, and granular policy enforcement that can be tailored to different departments, roles, and spending categories.

The key advantage is that corporate cards don't require personal guarantees, meaning founder and executive assets stay protected if the business can't pay its bills. This distinction alone makes corporate programs worth pursuing for qualifying companies, as it draws a clean line between business obligations and personal finances. Liability structures vary significantly between programs, with some placing responsibility entirely on the company, others requiring individual employees to pay and seek reimbursement, and some splitting it between both parties according to specific terms. Understanding which model your program uses is critical because it affects everything from employee onboarding to how you handle disputed charges and terminations.

Choosing the right structure

Choosing between these options comes down to three factors that you should evaluate honestly before committing.

1. Consider your company structure and whether you can even qualify for corporate programs given their revenue and cardholder minimums.
2. Think carefully about your risk tolerance and whether you're comfortable with personal guarantees that put your own assets on the line.
3. Evaluate your control requirements and whether basic issuer limits will suffice or you need granular category restrictions, approval workflows, and real time policy enforcement.

Most companies start with small business cards and authorized users, then graduate to corporate programs as they grow past 50 employees and establish the financial track record that issuers require.

Liability is the question that keeps finance leaders up at night when considering employee cards, and rightfully so. When an employee charges $5,000 at a merchant that has nothing to do with your business, someone has to pay that bill. The answer depends entirely on how your card program is structured, what agreements you have in place, and sometimes which state you operate in.

Corporate liability programs

Corporate liability is the most common structure for companies with employee card programs. Under this arrangement, the company bears full responsibility for all charges on employee cards regardless of whether those charges were authorized or appropriate.

The business pays the card issuer directly, and any disputes about misuse become internal matters between the company and the employee rather than involving the card issuer. This structure makes sense when you have strong controls in place and want to simplify the payment process, since employees never have to worry about fronting money or their personal credit being affected. The risk is obvious though. If an employee goes rogue or makes honest mistakes, you're on the hook first and have to pursue recovery through internal processes or legal action after the fact.

Individual liability programs

Individual liability is when employees are responsible for paying their card balances directly. The employee receives a statement, pays the card issuer from their personal funds, and then submits for reimbursement through your normal expense reporting process.

Companies choose this structure because it creates strong natural incentives for employees to follow policies and document expenses properly. Nobody wants to be stuck with a charge the company won't reimburse. The downside is that you're essentially asking employees to be short term lenders to the business, which can create cash flow problems for workers and resentment when reimbursements take too long.

Joint liability programs

Joint liability attempts to split the difference by holding both the company and the employee responsible under different circumstances. These programs typically make the company liable for charges that comply with policy while holding employees personally responsible for unauthorized or personal purchases.

The specific terms vary significantly between card issuers and individual agreements. Some programs report to employee credit bureaus only after charges go unpaid for 180 days, giving the company time to resolve disputes internally before employees face credit consequences. The complexity of joint liability programs means you need to read the fine print carefully and make sure employees understand exactly what they're agreeing to when they accept a card.

Legal considerations you cannot ignore

Business credit cards lack many of the consumer protections that personal cardholders take for granted, which has real implications for how you structure your program. The Truth in Lending Act doesn't apply to business cards, which give issuers more flexibility in changing terms and less obligation to disclose them clearly. The Fair Credit Billing Act gives you only 60 days to dispute charges, a window that closes quickly when you're reconciling expenses monthly and issues don't surface until statements arrive.

Getting employee cards into the right hands requires more preparation than most companies expect. Rushing to order cards before establishing policies and controls is a recipe for problems that are much harder to fix after the fact. The companies that run successful employee card programs treat the initial setup as a project with distinct phases, each building on the one before.

1. Evaluate card options and providers

Start by understanding what you actually need from a card program before you start comparing providers. Consider how many employees will need cards now and how that number might grow over the next two years. Think about what kinds of purchases they'll make, whether that's travel bookings, software subscriptions, office supplies, or client entertainment. Identify what integrations matter for your accounting workflow and whether you need connections to specific software like QuickBooks, NetSuite, or your HRIS system.

The questions you ask potential providers reveal a lot about how the relationship will work. Find out what spending controls are available and how granular they get, since basic limits are table stakes but category restrictions and approval workflows separate serious platforms from basic card issuers. Ask about the timeline from application to cards in hand, because traditional banks often take two weeks or more while modern providers can issue virtual business credit cards instantly and physical cards within days. Understand the fee structure completely, including annual fees, foreign transaction fees, and any charges for additional cards or features.

2. Establish your credit card policy

Do not issue employee cards until you have a written company credit card policy that covers the essential questions employees will have. The policy should specify who is eligible for cards, what expenses are approved, what's explicitly prohibited, how much employees can spend, and what documentation they need to provide. It should also cover what happens when things go wrong, from lost cards to policy violations to termination procedures.

Building the policy shouldn't happen in a vacuum. Finance needs to own the document, but HR should weigh in on eligibility criteria and consequences for violations, legal should review liability language and termination procedures, and operations leaders should validate that the approved expense categories match how work actually gets done. This cross functional input takes longer than having one person write the policy in an afternoon, but it produces a document people will actually follow because it reflects reality rather than theory.

3. Set up spending controls and limits

Controls are where policy meets technology, and getting them right prevents problems rather than just punishing them after the fact. Start with per employee spending limits based on role and typical purchasing patterns, setting higher limits for executives and traveling salespeople while keeping tighter constraints on employees who only need cards for occasional purchases.

Merchant category restrictions add another layer of protection by blocking charges at business types that have no legitimate connection to your operations. Most companies block casinos, adult entertainment, and liquor stores as an obvious starting point, but you might also restrict categories like personal care services or recreational goods depending on your business.

The expense approval process should match the size and risk of transactions, with small routine purchases flowing through automatically while larger or unusual charges require explicit approval. Expense management software lets you configure these workflows in detail, routing different transaction types to different approvers based on amount, category, or employee role.

4. Onboard cardholders with training

The final step is getting cards to employees along with the knowledge they need to use them correctly. Training doesn't need to be elaborate, but it should cover the key points that prevent problems. Walk through the expense policy and make sure employees understand what's approved, what's prohibited, and what falls into gray areas that require manager consultation. Show them how to submit receipts and documentation through whatever system you're using for business receipt management.

Practical details matter as much as policy during onboarding. Tell employees how to report lost or stolen cards immediately and give them a number they can call 24 hours a day. Explain what to do when a transaction is declined, since sometimes it's a fraud block that requires a quick call and other times it's a legitimate limit they need approval to exceed.

Finally, have employees sign the employee credit card agreement acknowledging they've received training, understand the policy, and accept responsibility for following it. This documentation protects you if problems arise later and reinforces to employees that card privileges come with real obligations.

Controls are only valuable if they stop problems before they happen rather than just documenting them afterward. The difference between a well controlled card program and a problematic one isn't the policies written down but the technical guardrails that enforce those policies at the moment of purchase.

When an employee tries to charge something outside their approved parameters, the best outcome is a declined transaction that prompts a conversation, not an approved charge that becomes a difficult cleanup three weeks later.

Per employee and per transaction limits

Every cardholder should have a monthly spending limit appropriate to their role and typical purchasing patterns. Entry level employees who occasionally buy office supplies might have limits of $500 to $1,000 per month, while a regional sales director booking travel and entertaining clients could reasonably need $10,000 or more.

These limits should reflect actual business needs rather than arbitrary round numbers, so look at historical spending patterns when setting them and adjust based on real usage over time. Setting limits too low creates friction and workarounds where employees use personal cards and expense them, which defeats the purpose of the program. Setting them too high provides inadequate protection against fraud or misuse.

Merchant category restrictions

Every credit card transaction carries a merchant category code that identifies the type of business where the purchase occurred. Your card platform can use these codes to automatically block transactions at merchant types that have no legitimate business purpose.

Category restrictions work best when they're tailored to specific roles rather than applied universally across the company. Marketing team members might need access to advertising and media categories that would be unusual for engineering. Sales might need broader restaurant and entertainment access for client meals while operations staff rarely have business reasons to dine out. The goal isn't to create an exhaustive list of every merchant that could possibly be legitimate but to block the categories where unauthorized spending most commonly occurs.

Virtual cards for vendor specific spending

Virtual business credit cards have transformed how companies manage recurring vendor payments and one time purchases with specific merchants. Unlike physical cards that work anywhere the network is accepted, virtual cards can be locked to a single vendor, a specific dollar amount, or a defined time window.

When you issue a virtual card for your monthly software subscription, you eliminate the risk of that card number being used anywhere else even if it's compromised. When you give an employee a virtual card for a specific conference registration, you know exactly what it can be used for and can set it to expire immediately after the expected charge.

The flexibility of virtual cards makes them ideal for situations where you want to enable spending without issuing permanent card credentials. A new employee who needs to book travel before their physical card arrives can get a virtual card in minutes. A contractor working on a specific project can receive a card that only works at pre-approved vendors and automatically deactivates when the project ends.

Approval workflows that match your organization

The expense approval process should reflect how your organization actually makes decisions rather than forcing an artificial hierarchy onto spending. Small companies might route all approvals to the founder or CFO, which works fine when volume is low but becomes a bottleneck as the team grows. Larger organizations typically push approval authority down to department managers for routine spending while escalating larger purchases or unusual categories to finance leadership.

Configure different approval paths for different transaction types rather than applying one size fits all rules. Routine office supplies under $200 might not need any approval beyond the existing monthly limit. Client entertainment over $500 might require manager approval before the card is even used. Software purchases over $1,000 might need both the direct manager and finance sign off given the potential for recurring commitments.

These workflows should be configured in your card platform so approvals happen in real time rather than retroactively.

Tax compliance is where employee card programs either pay dividends or create expensive headaches. The IRS has specific rules about business expense documentation, and failing to follow them can turn legitimate business expenses into taxable income for employees or disallowed deductions for the company.

These aren't obscure technicalities that only matter during audits. They affect your quarterly tax filings, your employees' W2s, and your company's overall tax liability.

The $75 receipt threshold and what it really means

IRS regulations require receipts for any business expense of $75 or more, a threshold that hasn't changed in decades despite inflation making it increasingly easy to hit. This means that a team lunch, a tank of gas for a rental car, or a modest hotel stay all require original documentation showing the vendor, amount, date, and what was purchased.

Lodging expenses require receipts regardless of amount, even if the nightly rate falls below $75, because the IRS treats travel accommodation differently than other expense categories.

What counts as adequate documentation goes beyond just having a receipt in hand. The IRS wants to see the amount, date, place, and business purpose of every expense. For meals and entertainment, you also need to document who attended and the business relationship or topic discussed. A credit card statement showing a charge at a restaurant doesn't satisfy these requirements because it lacks the itemization and business purpose that receipts and expense notes provide.

The 60 day substantiation deadline

Even when employees have receipts, timing matters for tax treatment. The IRS requires that employees substantiate expenses within 60 days of when they were incurred, and that employees return any excess reimbursement within 120 days. Miss these windows and the expense reimbursement may need to be treated as taxable wages rather than a non taxable reimbursement.

The 60 day clock starts ticking from the date of the expense, not the date of the credit card statement or the end of the month. For employees who travel frequently or make regular purchases, this creates a rolling compliance obligation that's easy to miss without systematic tracking.

Your expense reporting process should include automated reminders as expenses approach the 60 day mark and escalations when deadlines pass without substantiation. Cards can be suspended for employees who repeatedly miss documentation deadlines, which sounds harsh but is often the only way to get attention when reminder emails are ignored.

Accountable plans and why they matter

The IRS distinguishes between accountable plans and non accountable plans for expense reimbursement, and the classification has significant tax consequences.

An accountable plan requires three things to qualify:

1. Expenses must have a business connection, meaning they were incurred while performing services as an employee.
2. Employees must adequately account for expenses within 60 days
3. Employees must return any excess reimbursement within 120 days.

When these conditions are met, reimbursements are not taxable income to the employee and are fully deductible by the company. Fail to meet accountable plan requirements and you're operating a non accountable plan whether you intended to or not. Under a non accountable plan, all reimbursements are treated as taxable wages subject to income tax withholding and payroll taxes. Most companies intend to operate accountable plans but drift into non accountable treatment through sloppy documentation practices and missed deadlines.

Record retention requirements

Keeping records isn't just about surviving an audit, though that's certainly part of it. The IRS requires businesses to retain expense documentation for at least three years from the date the return was filed or two years from the date the tax was paid, whichever is later. For most practical purposes, this means keeping everything for at least four years to be safe.

Physical receipts fade, get lost, and take up storage space, which is why digital receipt capture has become the standard for modern expense programs. Photos of receipts stored in expense management software satisfy IRS documentation requirements as long as they clearly show the required information. The key is ensuring receipts are captured at full quality and stored in a system with reliable backup and search capabilities.

When an auditor asks for documentation on a specific transaction from three years ago, you need to produce it quickly and completely.

Fraud losses hit businesses harder than most executives realize until it happens to them. According to the Association of Certified Fraud Examiners, the average company loses around $120,000 to asset misappropriation schemes. The spending controls covered earlier will prevent many issues, but they won't catch everything. External fraud from stolen card numbers and internal misuse by trusted employees both require active monitoring and a clear plan for when something goes wrong.

Watch for warning sign patterns even when individual charges fall within policy limits. Round number transactions, like exactly $100 or $500, are statistically unusual for legitimate purchases and may indicate fictitious expenses or gift card purchases. Transactions just below approval thresholds suggest deliberate structuring to avoid oversight, particularly when the same cardholder repeatedly charges $495 when the approval trigger is $500. Employees who become defensive when asked about expense details or who consistently submit documentation at the last possible moment may be buying time to create supporting materials. The companies that catch fraud early are the ones paying attention to these patterns rather than assuming everything is fine because no single transaction looks obviously wrong.

When fraud is detected or suspected, speed matters more than perfection. For external fraud, immediately freeze the compromised card and report unauthorized transactions to the issuer within the 60 day window required by the Fair Credit Billing Act. Most issuers will reverse fraudulent charges if reported promptly, but delays can result in the company absorbing losses that should have been covered. Internal misuse requires a more delicate approach. Document the suspicious activity thoroughly before confronting the employee, involve HR and legal counsel, and keep detailed records in case the matter eventually involves law enforcement or litigation.

Most companies start their card programs with traditional banks because that's what they know, then gradually realize the limitations as they scale. Legacy card programs require manual work at every step, from paper applications that take weeks to process to spending controls that can only be adjusted by calling customer service.

The gap between what businesses need and what traditional card infrastructure provides has created space for platforms built from the ground up around how companies actually operate today.

No personal guarantee required

The personal guarantee requirement on traditional business cards puts founder and executive assets directly at risk if the business can't pay its obligations. Sign a personal guarantee and your house, savings, and personal credit are all on the line for company spending you may not even directly control.

Brex eliminates this barrier entirely by offering business credit cards with no personal guarantee that underwrite based on the business rather than individual founders. The application process uses your EIN and business financials to determine credit limits, leaving founder and executive personal credit completely out of the equation. Your personal credit score isn't affected by business card activity, your personal assets aren't collateral for business obligations, and you can scale card access confidently without increasing personal exposure.

Automated receipt matching and policy enforcement

The administrative overhead of traditional card programs grows linearly with card count, requiring more finance team hours for every employee added. Receipt collection alone consumes enormous time, with finance staff chasing documentation, matching receipts to transactions, and following up on missing items every month.

Brex's spend management software approaches the problem differently by automating the tedious work that bogs down finance teams. The platform uses AI to auto generate receipt information and memos when physical receipts aren't available, filling gaps that would otherwise require employee follow up. Submitted receipts are automatically matched to transactions without manual intervention.

Policy enforcement happens at the moment of purchase rather than during review, blocking transactions that violate spending rules before they ever post to the account.

Dynamic credit limits that grow with your business

Traditional business credit card limits are set during application and adjusted through formal review processes that involve paperwork, waiting periods, and often disappointment when the increase you need doesn't materialize.

Brex takes a fundamentally different approach by adjusting limits dynamically based on your business's financial position. Connect your bank accounts and Brex continuously underwrites based on actual cash balances, increasing limits automatically as your financial position strengthens. Users commonly report limits ten to thirty times higher than traditional business cards offer for comparable businesses, with adjustments happening in real time rather than through quarterly review cycles.

When you close a funding round, limits reflect your new financial reality within days rather than requiring a formal application process.

Instant card provisioning

Getting cards into employee hands through traditional programs involves application forms, approval queues, card production, and mail delivery, a process that commonly takes two weeks or longer from request to receipt.

Brex compresses this timeline dramatically through a combination of instant virtual card issuance and streamlined physical card delivery. Administrators can issue virtual business credit cards in minutes directly from the dashboard, giving new employees immediate purchasing capability while physical cards are in transit. Physical cards arrive within three to eight business days.

Integration with major HRIS platforms means new employees can be automatically provisioned with appropriate card access as part of the standard onboarding workflow. When someone joins your company, they can have a working card with appropriate limits and category permissions before they finish their first day paperwork.

Granular controls that enforce policy automatically

The spending controls available through traditional business cards are typically limited to basic per card limits with no granularity around categories, merchants, or approval workflows. Changes to these limits often require phone calls to customer service and take days to implement.

Brex provides controls granular enough to encode your actual spending policies into the card infrastructure itself. Set different limits for different employees based on role, restrict specific merchant categories by cardholder, and configure approval workflows that route transactions to appropriate managers based on amount or type. Changes take effect immediately rather than requiring processing time.

Virtual cards can be locked to specific vendors, set to expire after single use, or configured with exact dollar amounts that prevent overcharges. Budgets can be created at the team or project level with real time tracking against limits, giving budget owners visibility without requiring them to review every transaction manually.

Issuing business credit cards to employees is one of those operational decisions that touches nearly every part of your financial operations. When done right, you eliminate reimbursement friction, gain real time visibility into spending, and free your finance team from hours of manual reconciliation every month. The key is choosing the right card structure, building policies that match how your business operates, and implementing controls that prevent problems automatically.The card program you choose shapes your experience with employee spending for years to come

Brex is more than just a corporate card program. Brex brings together business banking accounts that earn yield on your cash balances, expense management software that automates receipt matching and policy enforcement, and travel booking capabilities that handle the full lifecycle from reservation through reconciliation. Instead of cobbling together separate solutions for cards, banking, expenses, and travel, you get an integrated financial stack where data flows automatically between functions and finance teams spend less time on manual work.

If you're ready to stop managing around the limitations of traditional business cards and start running a spending program that actually works the way fast-growing businesses need it to, sign up for a Brex card today.