diff --git a/src/components/MoneyRequestConfirmationList.tsx b/src/components/MoneyRequestConfirmationList.tsx
index fe616374347e..9d3734cc611d 100755
--- a/src/components/MoneyRequestConfirmationList.tsx
+++ b/src/components/MoneyRequestConfirmationList.tsx
@@ -908,6 +908,11 @@ function MoneyRequestConfirmationList({
                 return;
             }
 
+            if (iouCategory && policyCategories && (!policyCategories[iouCategory] || !policyCategories[iouCategory]?.enabled)) {
+                setFormError('violations.categoryOutOfPolicy');
+                return;
+            }
+
             const transactionTag = getTag(transaction);
             if (transactionTag.length > CONST.API_TRANSACTION_TAG_MAX_LENGTH) {
                 setFormError('iou.error.invalidTagLength');
diff --git a/src/components/MoneyRequestConfirmationListFooter.tsx b/src/components/MoneyRequestConfirmationListFooter.tsx
index eec37a60dc1d..bde1179a2379 100644
--- a/src/components/MoneyRequestConfirmationListFooter.tsx
+++ b/src/components/MoneyRequestConfirmationListFooter.tsx
@@ -387,6 +387,7 @@ function MoneyRequestConfirmationListFooter({
     const shouldDisplayDistanceRateError = formError === 'iou.error.invalidRate';
     const shouldDisplayTagError = formError === 'violations.tagOutOfPolicy';
     const shouldDisplayTaxRateError = formError === 'violations.taxOutOfPolicy';
+    const shouldDisplayCategoryError = formError === 'violations.categoryOutOfPolicy';
 
     const showReceiptEmptyState = shouldShowReceiptEmptyState(iouType, action, policy, isPerDiemRequest);
     // The per diem custom unit
@@ -621,6 +622,8 @@ function MoneyRequestConfirmationListFooter({
                     disabled={didConfirm}
                     interactive={!isReadOnly}
                     rightLabel={isCategoryRequired ? translate('common.required') : ''}
+                    brickRoadIndicator={shouldDisplayCategoryError ? CONST.BRICK_ROAD_INDICATOR_STATUS.ERROR : undefined}
+                    errorText={shouldDisplayCategoryError ? translate(formError) : ''}
                 />
             ),
             shouldShow: shouldShowCategories,
diff --git a/src/pages/iou/request/step/IOURequestStepConfirmation.tsx b/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
index aa835f1348ce..b9c5bd04097f 100644
--- a/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
+++ b/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
@@ -381,11 +381,6 @@ function IOURequestStepConfirmation({
                 }
                 continue;
             }
-
-            // Clear category field when the category doesn't exist for selected policy, or it's disabled
-            if (!policyCategories?.[item.category] || !policyCategories[item.category]?.enabled) {
-                setMoneyRequestCategory(item.transactionID, '', policy?.id, isMovingTransactionFromTrackExpense);
-            }
         }
         // We don't want to clear out category every time the transactions change
         // eslint-disable-next-line react-compiler/react-compiler, react-hooks/exhaustive-deps