diff --git a/src/libs/IOUUtils.ts b/src/libs/IOUUtils.ts
index 3682b28943dc..8f74ac4ae6df 100644
--- a/src/libs/IOUUtils.ts
+++ b/src/libs/IOUUtils.ts
@@ -97,13 +97,18 @@ function calculateAmount(numberOfSplits: number, total: number, currency: string
  * Calculate a split amount in backend cents from a percentage of the original amount.
  * - Clamps percentage to [0, 100]
  * - Preserves decimal precision in percentage (supports 0.1 precision)
- * - Uses absolute value of the total amount (cents)
+ * - Preserves the sign of the original amount (negative amounts stay negative)
  */
 function calculateSplitAmountFromPercentage(totalInCents: number, percentage: number): number {
     const totalAbs = Math.abs(totalInCents);
     // Clamp percentage to [0, 100] without rounding to preserve decimal precision
     const clamped = Math.min(100, Math.max(0, percentage));
-    return Math.round((totalAbs * clamped) / 100);
+    const amount = Math.round((totalAbs * clamped) / 100);
+    // Return 0 for zero amounts to avoid -0
+    if (amount === 0) {
+        return 0;
+    }
+    return totalInCents < 0 ? -amount : amount;
 }
 
 /**
diff --git a/tests/unit/IOUUtilsTest.ts b/tests/unit/IOUUtilsTest.ts
index a4d64034e77b..1032d4ba8d54 100644
--- a/tests/unit/IOUUtilsTest.ts
+++ b/tests/unit/IOUUtilsTest.ts
@@ -185,10 +185,20 @@ describe('IOUUtils', () => {
             expect(IOUUtils.calculateSplitAmountFromPercentage(8900, 7.7)).toBe(685);
         });
 
-        test('Clamps percentage between 0 and 100 and uses absolute total', () => {
+        test('Clamps percentage between 0 and 100', () => {
             expect(IOUUtils.calculateSplitAmountFromPercentage(20000, -10)).toBe(0);
             expect(IOUUtils.calculateSplitAmountFromPercentage(20000, 150)).toBe(20000);
-            expect(IOUUtils.calculateSplitAmountFromPercentage(-20000, 25)).toBe(5000);
+        });
+
+        test('Preserves negative sign for negative amounts (negative expense splits)', () => {
+            // When the original transaction is negative, split amounts should also be negative
+            expect(IOUUtils.calculateSplitAmountFromPercentage(-20000, 25)).toBe(-5000);
+            expect(IOUUtils.calculateSplitAmountFromPercentage(-20000, 50)).toBe(-10000);
+            expect(IOUUtils.calculateSplitAmountFromPercentage(-10000, 33.3)).toBe(-3330);
+            // Edge case: 0% results in 0 amount (not -0)
+            expect(IOUUtils.calculateSplitAmountFromPercentage(-20000, 0)).toBe(0);
+            // Full amount should also be negative
+            expect(IOUUtils.calculateSplitAmountFromPercentage(-20000, 100)).toBe(-20000);
         });
     });