diff --git a/src/libs/actions/IOU/index.ts b/src/libs/actions/IOU/index.ts
index 26ab90d84dc61..85fa9909c223c 100644
--- a/src/libs/actions/IOU/index.ts
+++ b/src/libs/actions/IOU/index.ts
@@ -7167,8 +7167,11 @@ function getIOUReportActionWithBadge(
             return false;
         }
         const iouReport = getReportOrDraftReport(action.childReportID);
-        // Only show to the actual payer, exclude admins with bank account access
-        if (canIOUBePaid(iouReport, chatReport, policy, undefined, undefined, undefined, undefined, invoiceReceiverPolicy)) {
+        // Show to the actual payer, or to policy admins via the pay-elsewhere path for negative expenses
+        if (
+            canIOUBePaid(iouReport, chatReport, policy, undefined, undefined, undefined, undefined, invoiceReceiverPolicy) ||
+            canIOUBePaid(iouReport, chatReport, policy, undefined, undefined, true, undefined, invoiceReceiverPolicy)
+        ) {
             actionBadge = CONST.REPORT.ACTION_BADGE.PAY;
             return true;
         }
diff --git a/tests/actions/IOUTest.ts b/tests/actions/IOUTest.ts
index f1dd7dc36b294..fb524f429b8fc 100644
--- a/tests/actions/IOUTest.ts
+++ b/tests/actions/IOUTest.ts
@@ -13785,6 +13785,140 @@ describe('actions/IOU', () => {
             expect(result.actionBadge).toBe(CONST.REPORT.ACTION_BADGE.SUBMIT);
         });
 
+        it('should return PAY badge for negative expense (credit) via onlyShowPayElsewhere path', async () => {
+            const chatReportID = '500';
+            const iouReportID = '501';
+            const policyID = '502';
+
+            const fakePolicy: Policy = {
+                ...createRandomPolicy(Number(policyID)),
+                id: policyID,
+                type: CONST.POLICY.TYPE.TEAM,
+                approvalMode: CONST.POLICY.APPROVAL_MODE.BASIC,
+                role: CONST.POLICY.ROLE.ADMIN,
+                reimbursementChoice: CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL,
+            };
+
+            const fakeChatReport: Report = {
+                ...createRandomReport(Number(chatReportID), CONST.REPORT.CHAT_TYPE.POLICY_EXPENSE_CHAT),
+                reportID: chatReportID,
+                policyID,
+            };
+
+            // For a negative/credit expense, total is positive on expense reports
+            // getMoneyRequestSpendBreakdown flips sign: reimbursableSpend = -total = -5000 (negative)
+            // The first canIOUBePaid call (onlyShowPayElsewhere=false) returns false because reimbursableSpend < 0
+            // The second canIOUBePaid call (onlyShowPayElsewhere=true) returns true via canShowMarkedAsPaidForNegativeAmount
+            const fakeIouReport: Report = {
+                ...createRandomReport(Number(iouReportID), CONST.REPORT.CHAT_TYPE.POLICY_EXPENSE_CHAT),
+                reportID: iouReportID,
+                type: CONST.REPORT.TYPE.EXPENSE,
+                policyID,
+                stateNum: CONST.REPORT.STATE_NUM.APPROVED,
+                statusNum: CONST.REPORT.STATUS_NUM.APPROVED,
+                managerID: RORY_ACCOUNT_ID,
+                total: 5000,
+                nonReimbursableTotal: 0,
+                isWaitingOnBankAccount: false,
+            };
+
+            const fakeTransaction: Transaction = {
+                ...createRandomTransaction(0),
+                reportID: iouReportID,
+                amount: 100,
+                status: CONST.TRANSACTION.STATUS.POSTED,
+                bank: '',
+            };
+
+            await Onyx.set(`${ONYXKEYS.COLLECTION.POLICY}${policyID}`, fakePolicy);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${chatReportID}`, fakeChatReport);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${iouReportID}`, fakeIouReport);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.TRANSACTION}${fakeTransaction.transactionID}`, fakeTransaction);
+
+            const reportPreviewAction = {
+                reportActionID: iouReportID,
+                actionName: CONST.REPORT.ACTIONS.TYPE.REPORT_PREVIEW,
+                created: '2024-08-08 19:00:00.000',
+                childReportID: iouReportID,
+                message: [{type: 'TEXT', text: 'Report preview'}],
+            };
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${chatReportID}`, {
+                [reportPreviewAction.reportActionID]: reportPreviewAction,
+            });
+            await waitForBatchedUpdates();
+
+            const result = getIOUReportActionWithBadge(fakeChatReport, fakePolicy, {}, undefined);
+            expect(result.reportAction).toMatchObject(reportPreviewAction);
+            expect(result.actionBadge).toBe(CONST.REPORT.ACTION_BADGE.PAY);
+        });
+
+        it('should return undefined actionBadge for REIMBURSEMENT_NO policy with non-SUBMITTED status', async () => {
+            const chatReportID = '600';
+            const iouReportID = '601';
+            const policyID = '602';
+
+            const fakePolicy: Policy = {
+                ...createRandomPolicy(Number(policyID)),
+                id: policyID,
+                type: CONST.POLICY.TYPE.TEAM,
+                approvalMode: CONST.POLICY.APPROVAL_MODE.BASIC,
+                role: CONST.POLICY.ROLE.ADMIN,
+                reimbursementChoice: CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_NO,
+            };
+
+            const fakeChatReport: Report = {
+                ...createRandomReport(Number(chatReportID), CONST.REPORT.CHAT_TYPE.POLICY_EXPENSE_CHAT),
+                reportID: chatReportID,
+                policyID,
+            };
+
+            // REIMBURSEMENT_NO + APPROVED (not SUBMITTED):
+            // First canIOUBePaid call (onlyShowPayElsewhere=false) returns false (early-exit for REIMBURSEMENT_NO)
+            // Second canIOUBePaid call (onlyShowPayElsewhere=true) also returns false (statusNum !== SUBMITTED)
+            // So no PAY badge is shown
+            const fakeIouReport: Report = {
+                ...createRandomReport(Number(iouReportID), CONST.REPORT.CHAT_TYPE.POLICY_EXPENSE_CHAT),
+                reportID: iouReportID,
+                type: CONST.REPORT.TYPE.EXPENSE,
+                policyID,
+                stateNum: CONST.REPORT.STATE_NUM.APPROVED,
+                statusNum: CONST.REPORT.STATUS_NUM.APPROVED,
+                managerID: RORY_ACCOUNT_ID,
+                total: -5000,
+                nonReimbursableTotal: 0,
+                isWaitingOnBankAccount: false,
+            };
+
+            const fakeTransaction: Transaction = {
+                ...createRandomTransaction(0),
+                reportID: iouReportID,
+                amount: 100,
+                status: CONST.TRANSACTION.STATUS.POSTED,
+                bank: '',
+            };
+
+            await Onyx.set(`${ONYXKEYS.COLLECTION.POLICY}${policyID}`, fakePolicy);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${chatReportID}`, fakeChatReport);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${iouReportID}`, fakeIouReport);
+            await Onyx.set(`${ONYXKEYS.COLLECTION.TRANSACTION}${fakeTransaction.transactionID}`, fakeTransaction);
+
+            const reportPreviewAction = {
+                reportActionID: iouReportID,
+                actionName: CONST.REPORT.ACTIONS.TYPE.REPORT_PREVIEW,
+                created: '2024-08-08 19:00:00.000',
+                childReportID: iouReportID,
+                message: [{type: 'TEXT', text: 'Report preview'}],
+            };
+            await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${chatReportID}`, {
+                [reportPreviewAction.reportActionID]: reportPreviewAction,
+            });
+            await waitForBatchedUpdates();
+
+            const result = getIOUReportActionWithBadge(fakeChatReport, fakePolicy, {}, undefined);
+            expect(result.reportAction).toBeUndefined();
+            expect(result.actionBadge).toBeUndefined();
+        });
+
         it('should return undefined actionBadge when report is settled', async () => {
             const chatReportID = '400';
             const iouReportID = '401';