A well-funded and successful enterprise might want to chip in on fuel costs, but a young startup should perhaps put its money elsewhere. This really depends on a lot of different things. But your employees might incur travel costs when they're not on the road, for example when commuting in public transport or driving to the office every day. (We explain HMRC's meal allowance rates here.) Transport costsĭuring a trip, most forms of transport should be covered - it's work travel after all. The scope of these kinds of “networking“ expenses should include most entertainment, like going to a music or sporting event - but it only counts if the client is actually present. In this case, covering these costs would definitely be in the interest of your business. But then there's the possibility that an employee wants to treat a client or contact to dinner, because they think it would positively impact the business relationship. If an employee is having dinner on a work trip, it should automatically be covered as a travel expense - of course. (For UK readers, here's our guide to HMRC travel expenses, and a guide to Germany's per diem rules for our German readers.) Meals and entertainment Both of these things don't come cheap, and seeing as they’re an unmissable part of the business trip it makes sense to cover them as expenses.Ĭheck out how to set up a stellar travel expense policy in a previous blog post. For example, visas or other travel documents might be needed when traveling to some parts of the world, while others could even require employees to get vaccinated. While all of these expenses are relatively common, there are also some less known travel costs that are worth mentioning. Upon arrival at the destination, lodging costs are another staple expense that needs to be covered. The flight itself also accounts for a large sum, and should include any in-flight food and drink purchases up to a reasonable amount. It all starts with getting to the airport - a short trip that starts racking up costs by taking public transport or a taxi service. Regardless, if remote work simply isn’t an option for you, then read on for some reimbursable expense examples. You can find out how to get started with a transition to remote work on CompanyReviews if you’re interested. Not only does it bring down costs for everyone involved, but it’s also more sustainable and preferred by employees. Many companies manage by working remotely throughout the year and probably will continue to do so. Business travel is not as crucial as it was once thought to be. You might want to consider working remotely if cutting costs is important to your business. Traveling for business purposes means making a lot of payments, and most of these should be seen as valid expenses. Travel expensesĪs one of the biggest sources of employee reimbursement, company travel covers a large number of things. Now that we know more about the characteristics of valid expenses, it's time to dig deeper into the various categories that your company could consider reimbursing. (For UK businesses the exact rules are clearly laid out in this online guidebook.) Reimbursable expense examples If an expense passes these tests, it might very well be eligible for tax deduction purposes. Any surplus amount that the employee has left from the original reimbursement should also be paid back to the employer within the same time frame. The information that should be displayed on the record to make it legally valid differs per country, but at the very minimum it should include the total amount (with tax), the time and place of purchase and a description of the product or service provided.įinally, any reimbursable payments should always be reported to the relevant department within a reasonable amount of time. Secondly, it's vital that they have evidence of the payment in the form of an expense receipt, invoice or other proof of purchase. The rules vary slightly from place to place so be sure to check your local legislation for the exact legal definition. This is a pretty broad definition, and could cover anything from an overnight hotel stay during a business trip, to an extra monitor for their work computer. It should be a purchase that's related to the services of an employee to his or her employer - in other words, something that an employee needs to do their job. To keep things fair and transparent, you need to set clear rules for what counts as a reimbursable expense.įirst off, the expense must have a clear business character. It is both morally and legally required that the company reimburses them for these payments promptly and in full.īut this doesn't mean that employees get to claim reimbursement for every payment they make. When employees incur expenses on behalf of your company, they'll occasionally need to spend their own money. It's important to define what we're talking about here.
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