One simple way to set this up that minimizes administrative overhead is to estimate a base amount for each remote employee, and automatically reimburse that amount. If the employee's actual expenses exceed the base amount, then and only then do manual processes and $20 expense reports need to be involved.

When I said "for each remote employee," it would probably work best to have the base amount set up individually for each remote worker, based on relevant factors such as cost of electricity and such, when they start working remotely. If the base amount proves to be consistently too low, after a period of say, 6 months, then the employee could file some sort of amendment and have the amount reviewed. If the increased reimbursement based on the amendment request is determined to be reasonable, then just retroactively reimburse the difference to the employee and continue forward with the new base amount. It should also probably be re-reviewed yearly.

That should get it done for every remote employee in the company, with a maximum of around 2 manual interventions per year, rather than an expense report every 2 weeks or anything ridiculous like that.

Also isnt this basic admin just the cost of doing business?

I should probably not tell you that in europe its common to be reimbursed for traveling expenses when going to the office. Calculated per commute at 0.19 euro per kilometer. So its unique per employee. No company has gone bankrupt due to administrative weight yet.

$2,000 a year would be around 10% extra income not related to staying alive.

I wouldn't call 10% a minor deal.

Also your point about 1-2% cost shows why this is a good bill. Cover the things you need to, pay a few points of payroll and get a significant benefit for your employees.