The ABCs of Travel Expense Reimbursement: A Beginner's Handbook

The ABCs of Travel Expense Reimbursement: A Beginner’s Handbook

Traveling for work can be an exciting adventure, but it often comes with a myriad of expenses. Fortunately, many employers offer travel expense reimbursement to ease the financial burden on their employees. In this beginner’s handbook, we’ll explore the world of travel expense reimbursement , understanding its intricacies, and learn about Zaggle EMS which can make the process much smoother.

Understanding Travel Expense Reimbursement

Travel Expense Reimbursement is a process where an employer reimburses an employee for expenses incurred during a business trip. These expenses can include transportation, accommodation, meals, and miscellaneous costs. Employees need to understand what is eligible for reimbursement and how to track and document these expenses properly.

Common Travel Expenses

Let’s break down the common travel expenses into four categories:

A. Transportation Expenses: Transportation expenses can include airfare, train tickets, car rentals, and even parking fees. For instance, a flight from Hyderabad to Mumbai or a taxi ride to the conference venue can fall under this category.

B. Accommodation Expenses: Accommodation expenses cover the costs of staying in hotels, Airbnb rentals, or other lodging options. Whether it’s a five-star hotel in Delhi or a cozy guest house in the city, these expenses are eligible for reimbursement.

C. Meals and Dining Expenses: This category covers the cost of food and dining while on a business trip. It includes breakfast, lunch, dinner, and even snacks. Whether you’re dining at a fancy restaurant or grabbing a quick sandwich on the go, these expenses add up.

D. Miscellaneous Expenses: Miscellaneous expenses can be a bit tricky, as they encompass a wide range of costs, from conference fees and dry cleaning to business calls and internet charges. It’s essential to keep track of these smaller expenses, as they can significantly impact your reimbursement.

Expense Tracking and Documentation

One of the main challenges in the travel expense reimbursement process is proper tracking and documentation. Keeping receipts and organizing expenses can be cumbersome, and paper records are prone to loss or damage.

One of the primary difficulties lies in the proper tracking and documentation of expenses . Keeping physical receipts and records can be cumbersome, leading to potential errors, lost paperwork, or delays in reimbursement. Efficient expense tracking and reporting are key to overcoming these challenges and ensuring a smooth reimbursement process.

This is where digital tools like Zaggle EMS play a crucial role, making the process more efficient and less error-prone.

A. Submitting Expense Reports

With Zaggle EMS, employees can submit expense reports conveniently, reducing paperwork and the risk of errors. Smart Scan, a feature within Zaggle EMS, allows you to create expenses by scanning receipts using OCR (Optical Character Recognition) technology. It’s available through the Zaggle mobile application. You can even attach up to three receipts per expense, making sure you have all the necessary documentation.

B. Reimbursement Process

Zaggle EMS streamlines the reimbursement process by providing a clear and structured platform for both employees and employers. It categorizes expenses, making it easier for organizations to understand where their money is going.

C. Approval Process

The approval process is a crucial step in the travel expense reimbursement journey, ensuring that expenses are legitimate and comply with company policies

Zaggle EMS allows you to establish a hierarchical or multi-stage approval flow to ensure expenses are reviewed by the right people in the organization. In Zaggle EMS, you can configure up to 5 levels of approval in your workflow. This flexibility accommodates the unique approval structures within various organizations, from small businesses to large enterprises.

The approval process is critical to maintaining financial responsibility within an organization and adhering to established policies. By configuring hierarchical approval flows, organizations can ensure that expense reports undergo the necessary scrutiny. Moreover, the flexibility in the number of approval levels and the ability to resubmit and approve rejected reports streamline the process, making travel expense reimbursement a transparent and accountable process for both employees and employers.

Tips for a Smooth Reimbursement Process

1. Stay Organized: Keep all your receipts in one place. Using digital tools like Zaggle EMS can help you store and organize them efficiently.

2. Submit Promptly: Don’t procrastinate in submitting your expense reports. The sooner you do, the quicker you’ll get reimbursed.

3. Know Your Company’s Policy : Familiarize yourself with your company’s reimbursement policy. Some expenses may have specific limits or requirements.

4. Double-check: Before submitting an expense report, double-check all the information. Accuracy is crucial to avoid any delays.

Travel expense reimbursement doesn’t have to be a daunting process. With the right knowledge and tools, such as Zaggle EMS , you can simplify the task of tracking, documenting, and reporting your expenses. By understanding the ABCs of travel expense reimbursement , you can make your business trips financially stress-free and focus on the work at hand. Remember, the key to a smooth reimbursement process is organization and the use of efficient digital tools. Safe travels!

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Travel Expense Policy

It is the policy of [Company Name] to reimburse staff for reasonable and necessary expenses incurred during approved work-related travel.

Employees seeking reimbursement should incur the lowest reasonable travel expenses and exercise care to avoid impropriety or the appearance of impropriety. Reimbursement is allowed only when reimbursement has not been, and will not be, received from other sources. If a circumstance arises that is not specifically covered in this travel policy, then the most conservative course of action should be taken.

Business travel policies are aligned with company reimbursement rules. All business-related travel paid with [Company Name] funds must comply with company expenditure policies.

Authorization and responsibility

Staff travel must be authorized. Travelers should verify that planned travel is eligible for reimbursement before making travel arrangements. Within 30 days of completion of a trip, the traveler must submit a travel reimbursement form and supporting documentation to obtain reimbursement of expenses.

An individual may not approve his or her own travel or reimbursement. The travel reimbursement form must be signed by the executive director or the director of finance (for travel over $[amount]) or by the business manager (for travel under $[amount]).

Travel and reimbursement for members of the management team must be approved by the executive director or the director of finance and will be reviewed annually by the internal auditor.

Designated approval authorities are required to review expenditures and withhold reimbursement if there is reason to believe that the expenditures are inappropriate or extravagant.

Personal funds

Travelers should review reimbursement guidelines before spending personal funds for business travel to determine if such expenses are reimbursable. See Section II: Travel Expenses/Procedures for details. [Company Name] reserves the right to deny reimbursement of travel-related expenses for failure to comply with policies and procedures.

Travelers who use personal funds to facilitate travel arrangements will not be reimbursed until after the trip occurs and proper documentation is submitted.

Vacation in conjunction with business travel

In cases in which vacation time is added to a business trip, any cost variance in airfare, car rental or lodging must be clearly identified on the travel request form. [Company Name] will not prepay any personal expenses with the intention of being "repaid" at a later time, nor will any personal expenses be reimbursed.

Occasionally it may be necessary for travelers to request exceptions to this travel policy. Requests for exceptions to the policy must be made in writing and approved by the executive director or by the director of finance. Exceptions related to the director's or the director of finance's expenses must be submitted to the opposite person or to the treasurer of the board of trustees for approval. In most instances, the expected turnaround time for review and approval is five business days.

Travel Expenses/Procedures

General information Authorized business travel for staff that includes prepayments must be pre-approved.

Reimbursement of parking, mileage, gasoline in lieu of mileage and ferry or bus passes do not require requests if they are under $[amount]. Requests for reimbursement of expenses over $[amount] are to be submitted on a travel reimbursement form.

Permissible prepaid travel expenses Before the travel, [Company Name] may issue prepayments for airfare, rail transportation, rental vehicles, conference registration fees and cash advances. Applicable policies and methods of payments for these prepayments follow.

Airfare. Travelers are expected to obtain the lowest available airfare that reasonably meets business travel needs. Airfare may be prepaid by the business office.

Travelers are encouraged to book flights at least [amount of time] in advance to avoid premium airfare pricing.

Coach class or economy tickets must be purchased for domestic or international flights with flight time totaling less than five consecutive hours excluding layovers.

A less-than-first-class ticket (i.e., business class) may be purchased at [Company Name]'s discretion for domestic or international flights with flight time exceeding five consecutive hours excluding layovers.

Airfare may be purchased with a credit card or check through the business office with a request for payment form.

Rail transportation. [Company Name] will prepay rail transportation provided that the cost does not exceed the cost of the least expensive airfare.

Rental vehicles. [Company Name] will pay for approved use of a rental vehicle. See the section on reimbursements below in this section.

Conference registration fees. Conference registration fees can be prepaid with a credit card or check through the business office with a request for payment form. Business-related banquets or meals that are considered part of the conference can be paid with the registration fees; however, such meals must be deducted from the traveler's per diem allowance.

Travel advances. Cash advances are authorized for specific situations that might cause undue financial hardship for business travelers. These situations are limited to staff traveling on behalf of [Company Name]. A maximum of 80 percent of the total estimated cost can be advanced.

Expenses associated with the travel must be reconciled and substantiated within two weeks of the return date. The traveler must repay [Company Name] for any advances in excess of the approved reimbursable expenses. The department initiating the travel is responsible for notifying the business office to deposit any excess funds into the appropriate departmental account.

Travel advances are processed by submitting a completed request for payment form and travel request form to the business office. Reimbursement for any remaining expenses is processed on a travel reimbursement form approved by the designated approval authority.

Reimbursements Requests for reimbursements of travel-related expenses are submitted on a travel reimbursement form. This form must be accompanied by supporting documentation. If the requested reimbursement exceeds 20 percent of the total pre-trip estimate, the travel reimbursement form must be signed by the executive director or the director of finance.

These forms must be submitted to the business office within two weeks after the trip is completed. Travel reimbursement forms not submitted within this time frame require exception approval from the executive director or from the director of finance.

Reimbursement of travel expenses is based on documentation of reasonable and actual expenses supported by the original, itemized receipts where required. Reimbursements that may be paid by [Company Name] are shown below.

Airfare. If the airfare was not prepaid by the business office, an original itemized airline receipt, an e-ticket receipt/statement or an Internet receipt/statement is required. The receipt must show the method of payment and indicate that payment was made.

Rail transportation. If rail transportation was not prepaid by the business office, an original itemized receipt, original e-ticket receipt/statement or Internet receipt/statement is required. The receipt must show the method of payment and indicate that payment was made.

Automobile (personally owned—domestic travel). A valid driver's license issued within the United States and personal automobile insurance are required for expenses to be reimbursed. Drivers should be aware of the extent of coverage (if any) provided by his or her automobile insurance company for travel that is business or not personal in nature.

Reimbursement for use of a personal automobile is based on the [Company Name] mileage rate.

A staff travel reimbursement form is required for reimbursement of all vehicle-related expenses, including gasoline, wear and tear, and personal auto insurance. As of [date], the rate is [$] per mile. Travelers may opt to request reimbursement for actual gasoline expenses in lieu of the [Company Name] mileage rate. In these instances original, itemized receipts are required.

Automobile (rental—domestic travel). Reimbursement for a commercial rental vehicle as a primary mode of transportation is authorized only if the rental vehicle is more economical than any other type of public transportation, or if the destination is not otherwise accessible. Vehicle rental at a destination city is reimbursable. Original receipts are required.

[Company Name] authorizes reimbursement for the most economic vehicle available. In certain circumstances larger vehicles may be rented, with supervisory approval. The rental agreement must clearly show the date and the points of departure/arrival, as well as the total cost. Drivers must adhere to the rental requirements, and restrictions must be followed. Original receipts are required.

When vehicle rentals are necessary, [Company Name] encourages travelers to purchase collision damage waiver (CDW) and loss damage waiver (LDW) coverage. [Company Name] will reimburse the cost of CDW and LDW coverage; all other insurance reimbursements will be denied.

Drivers should be aware of the extent of coverage (if any) provided by his or her automobile insurance company for travel that is business or not personal in nature.

Parking fees, tolls and other incidental costs associated with the vehicle use are not covered by the rental agreement.

Travelers are strongly encouraged to fill the gas tank before returning the vehicle to the rental agency to avoid service fees and more expensive fuel rates.

Conference registration fees. If the conference fee was not prepaid, [Company Name] will reimburse these fees, including business-related banquets or meals that are part of the conference registration. Original receipts to support the payment are required. If the conference does not provide a receipt, then a cancelled check, credit card slip/statement or documentation that the amount was paid is required for reimbursement.

A prorated amount for the meals provided must be deducted from the traveler's per diem. See Meals (per diem) for more detail. Entertainment activities such as golf outings and sightseeing tours will not be reimbursed.

Registration fees paid directly by an individual will not be reimbursed until the conference is completed.

Lodging (commercial). The cost of overnight lodging (room rate and tax only) will be reimbursed to the traveler if the authorized travel is 45 miles or more from the traveler's home or primary worksite.

Exceptions to this restriction may be approved in writing by the executive director or by the director of finance.

[Company Name] will reimburse lodging expenses at reasonable, single occupancy or standard business room rates. When the hotel or motel is the conference or convention site, reimbursement will be limited to the conference rate.

Only single room rates are authorized for payment or reimbursement unless the second party is representing the agency in an authorized capacity. If the lodging receipt shows more than a single occupancy, the single room rate must be noted. If reimbursement for more than the single room rate is requested, the name of the second person must be included.

Meals (per diem). Per diem allowances are reimbursable for in-state overnight travel that is 45 miles or more from the traveler's home or primary worksite.

Per diem allowances are applicable for all out-of-state travel that is 45 miles or more from the traveler's home or primary worksite.

[Company Name] per diem rates are based on the U.S. General Services Administration Guidelines, which vary by city location. In addition to meals these rates include incidental expenses such as laundry, dry cleaning and service tips (e.g., housekeeping or porter tips). Incidental expenses, unless specifically cited in this policy, will not be reimbursed.

Per diem reimbursements are based on departure and return times over the entire 24-hour day and are prorated accordingly.

If a free meal is served on the plane, included in a conference registration fee, built in to the standard, single hotel room rate or replaced by a legitimate business meal, the per diem allowance for that meal may not be claimed.

Receipts are not required for per diem allowances. Per diem allowances are reimbursed after the trip is completed.

Business meals. Travelers are required to follow [Company Name] expenditure policies when requesting reimbursement for business meals. Original itemized receipts are required.

Business expenses. Business expenses, including faxes, photocopies, Internet charges, data ports and business telephone calls incurred while on travel status, can be reimbursed. Original itemized receipts are required.

Parking. Original receipts are required for parking fees (including airport parking) totaling $[amount] or more. The lodging bill can be used as a receipt when charges are included as part of the overnight stay.

Telephone calls. The costs of personal telephone calls are the responsibility of the individual.

Tolls. Original receipts are required for tolls totaling $[amount] or more.

Miscellaneous transportation. Original receipts are required for taxi, bus, subway, metro, ferry and other modes of transportation if costs are $[amount] or more for each occurrence.

Visa, passport fees and immunizations. If these items are required for international travel, their reimbursement is left to the discretion of your supervisor. If approved by the designated authority, original itemized receipts are required.

Nonreimbursable Travel Expenses The following items that may be associated with business travel will not be reimbursed by [Company Name]:

  • Airline club memberships.
  • Airline upgrades.
  • Business class for domestic flights or first class for all flights.
  • Child care, babysitting, house-sitting, or pet-sitting/kennel charges.
  • Commuting between home and the primary work location.
  • Costs incurred by traveler's failure to cancel travel or hotel reservations in a timely fashion.
  • Evening or formal wear expenses.
  • Haircuts and personal grooming.
  • Laundry and dry cleaning.
  • Passports, vaccinations and visas when not required as a specific and necessary condition of the travel assignment.
  • Personal entertainment expenses, including in-flight movies, headsets, health club facilities, hotel pay-per-view movies, in-theater movies, social activities and related incidental costs.
  • Travel accident insurance premiums or purchase of additional travel insurance.
  • Other expenses not directly related to the business travel.

Travel for Non-Employees Additional costs for travel, lodging, meal or other travel expenses for spouses or other family members will not be reimbursed unless the individual has a bona fide company purpose for engaging in the travel or attending the event. Such travel is generally limited to senior management and should occur infrequently.

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Understanding business travel deductions

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IRS Tax Tip 2023-15, February 7, 2023

Whether someone travels for work once a year or once a month, figuring out travel expense tax write-offs might seem confusing. The IRS has information to help all business travelers properly claim these valuable deductions.

Here are some tax details all business travelers should know

Business travel deductions are available when employees must travel away from their  tax home  or  main place of work  for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep to meet the demands of their work while away.

Travel expenses  must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a  temporary work assignment  if the assignment length does not exceed one year.

Travel expenses for  conventions  are deductible if attendance benefits the business. There are special rules for conventions held  outside North America .

Deductible travel expenses include:

  • Travel by airplane, train, bus or car between your home and your business destination.
  • Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location.
  • Shipping of baggage and sample or display material between regular and temporary work locations.
  • Using a personally owned car for business.
  • Lodging and  meals .
  • Dry cleaning and laundry.
  • Business calls and communication.
  • Tips paid for services related to any of these expenses.
  • Other similar ordinary and necessary expenses related to the business travel.

Self-employed individuals or farmers with travel deductions

  • Those who are self-employed can deduct travel expenses on  Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) .
  • Farmers can use  Schedule F (Form 1040), Profit or Loss From Farming .

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the  performance of their duty .

Recordkeeping

Well-organized records  make it easier to prepare a tax return. Keep records such as receipts, canceled checks and other documents that support a deduction.

Subscribe to IRS Tax Tips

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What Are Travel Expenses?

Understanding travel expenses, the bottom line.

  • Deductions & Credits
  • Tax Deductions

Travel Expenses Definition and Tax Deductible Categories

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

about travel expenses reimbursement

For tax purposes, travel expenses are costs associated with traveling to conduct business-related activities. Reasonable travel expenses can generally be deducted from taxable income by a company when its employees incur costs while traveling away from home specifically for business. That business can include conferences or meetings.

Key Takeaways

  • Travel expenses are tax-deductible only if they were incurred to conduct business-related activities.
  • Only ordinary and necessary travel expenses are deductible; expenses that are deemed unreasonable, lavish, or extravagant are not deductible.
  • The IRS considers employees to be traveling if their business obligations require them to be away from their "tax home” substantially longer than an ordinary day's work.
  • Examples of deductible travel expenses include airfare, lodging, transportation services, meals and tips, and the use of communications devices.

Travel expenses incurred while on an indefinite work assignment that lasts more than one year are not deductible for tax purposes.

The Internal Revenue Service (IRS) considers employees to be traveling if their business obligations require them to be away from their "tax home" (the area where their main place of business is located) for substantially longer than an ordinary workday, and they need to get sleep or rest to meet the demands of their work while away.

Well-organized records—such as receipts, canceled checks, and other documents that support a deduction—can help you get reimbursed by your employer and can help your employer prepare tax returns. Examples of travel expenses can include:

  • Airfare and lodging for the express purpose of conducting business away from home
  • Transportation services such as taxis, buses, or trains to the airport or to and around the travel destination
  • The cost of meals and tips, dry cleaning service for clothes, and the cost of business calls during business travel
  • The cost of computer rental and other communications devices while on the business trip

Travel expenses do not include regular commuting costs.

Individual wage earners can no longer deduct unreimbursed business expenses. That deduction was one of many eliminated by the Tax Cuts and Jobs Act of 2017.

While many travel expenses can be deducted by businesses, those that are deemed unreasonable, lavish, or extravagant, or expenditures for personal purposes, may be excluded.

Types of Travel Expenses

Types of travel expenses can include:

  • Personal vehicle expenses
  • Taxi or rideshare expenses
  • Airfare, train fare, or ferry fees
  • Laundry and dry cleaning
  • Business meals
  • Business calls
  • Shipment costs for work-related materials
  • Some equipment rentals, such as computers or trailers

The use of a personal vehicle in conjunction with a business trip, including actual mileage, tolls, and parking fees, can be included as a travel expense. The cost of using rental vehicles can also be counted as a travel expense, though only for the business-use portion of the trip. For instance, if in the course of a business trip, you visited a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions .

The IRS allows other types of ordinary and necessary expenses to be treated as related to business travel for deduction purposes. Such expenses can include transport to and from a business meal, the hiring of a public stenographer, payment for computer rental fees related to the trip, and the shipment of luggage and display materials used for business presentations.

Travel expenses can also include operating and maintaining a house trailer as part of the business trip.

Can I Deduct My Business Travel Expenses?

Business travel expenses can no longer be deducted by individuals.

If you are self-employed or operate your own business, you can deduct those "ordinary and necessary" business expenses from your return.

If you work for a company and are reimbursed for the costs of your business travel , your employer will deduct those costs at tax time.

Do I Need Receipts for Travel Expenses?

Yes. Whether you're an employee claiming reimbursement from an employer or a business owner claiming a tax deduction, you need to prepare to prove your expenditures. Keep a running log of your expenses and file away the receipts as backup.

What Are Reasonable Travel Expenses?

Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.

Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.

Individual taxpayers need no longer fret over recordkeeping for unreimbursed travel expenses. They're no longer tax deductible by individuals, at least until 2025 when the provisions in the latest tax reform package are due to expire or be extended.

If you are self-employed or own your own business, you should keep records of your business travel expenses so that you can deduct them properly.

Internal Revenue Service. " Topic No. 511, Business Travel Expenses ."

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 13.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Page 7.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Pages 6-7, 13-14.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 4.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Pages 5, 7.

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  • Complete Guide to Reimbursing Employees for Travel Expenses

Published September 2, 2020 · Updated April 21, 2021

When an employee travels away from the office and incurs expenses, the company should reimburse them. Whether travelling across the world or just driving their car to a client’s location, getting the reimbursement right isn’t hard.

Keep reading to learn how to make proper employee reimbursements.

Accountable Plans

You’ll first need to decide if you will implement an accountable or nonaccountable plan. This is just as it sounds; either you’ll have employees be accountable for business expense reimbursements or not.

All businesses should have an expense reimbursement plan in writing. This includes corporations, sole proprietors, the self-employed, and non-profits. Non-profits should be extremely careful when reimbursing disqualified persons because nonaccountable plan reimbursements not properly approved or recorded can cause significant tax exposure to the charitable organization.

An accountable plan must follow the IRS guidelines for expense reimbursement. To qualify, the following rules must be met:

  • Expenses must be for business purposes.
  • Expenses must be adequately reported to the company in reasonable time.
  • Any excess reimbursement or allowance must be returned in a reasonable amount of time.

Any expense that doesn’t meet these three criteria is considered a reimbursement under a nonaccountable plan.

This distinction between these two types of plans is important because accountable plan reimbursements are not taxable to the employee, whereas nonaccountable plans are taxable.

Business Purpose

Expenses incurred as an employee while completing work for an employer have a business purpose. Examples include things like registration fees for a conference, taxi rides to the airport for a business trip, or meals while away on a business trip.

If however, an employer reimburses an employee for dinner when the employee works late, this does not qualify as a business purpose. This reimbursement would be taxable to the employee because it was made under a nonaccountable plan.

Reporting in a Reasonable Time

While what is considered a reasonable amount of time is subjective, the general rule is that all reimbursable expenses must be submitted within 60 days of when they were incurred.

Adequate reporting involves providing a record, like an expense report, of all expenses incurred and providing evidence, like receipts, to support the expenses.

Excess Reimbursement

If an employee receives a travel advance to cover travel expenses but spends less than the advance, the difference is an excess reimbursement and must be returned to the employer to not be taxable. If the excess isn’t returned in a reasonable amount of time, it’s taxable.

A reasonable period of time in this instance is generally deemed to be within 120 days of when the expense was incurred.

With a travel advance, employees should submit an expense report and receipts to substantiate all expenses.

Mileage and Business Use of Personal Vehicle

When an employee uses their personal vehicle for company business, you’ll need to reimburse them. You have three options.

  • Standard mileage rate
  • Actual costs
  • Monthly allowance

Standard Mileage Rate

If you use the standard mileage rate, it is 57.5 cents per mile for 2020.

You can pay more, but the IRS’ safe-harbor threshold of 57.5 cents per mile will allow you a tax deduction without having to substantiate the rate.

Note that the IRS typically updates rates in December. So, you can expect to see the 2021 rate announced in December 2020. IRS 2021 Mileage Rates are here.

IRS Standard Mileage Rates 2020

Actual Costs

Instead of using the standard rate, you can reimburse employees for actual expenses.

The employee will sum up all the costs of owning the vehicle including everything from fuel, maintenance, tolls, registration, and insurance. And based upon the percentage of business miles driven, that portion of the total actual costs is reimbursed.

Monthly Allowance

Using the monthly allowance method is relatively easy. Each month you provide a set dollar amount to the employee.

If you require the employee to provide a mileage log at the end of the month, this will determine if any part of the allowance is taxable. If no mileage log is required, the entire allowance is taxable under an unaccountable plan.

If a mileage log is provided and the employee drove less than expected, they should return the excess allowance within 30 days. If they don’t, the excess becomes taxable to them.

An employee’s commute from their home to their normal place of business is not a reimbursable expense. Any business miles driven in excess of the commute miles is reimbursable.

For example, an employee’s normal round-trip commute is 20 miles. On Fridays, the employee works on-site at a client’s office that is 30 miles away from the employee’s home. So, the employee drives 60 miles round-trip on Fridays. Since this is longer than he would drive if he commuted to the office, you’ll want to reimburse the employee for 40 miles (60 miles – 20 miles).

Mileage Logs

Employees should keep mileage logs when using a personal vehicle for business use. The log should include:

  • Employee’s name
  • Description of vehicle
  • Date of business use
  • Purpose of business use
  • Starting mileage on odometer
  • Ending mileage on odometer
  • Approval authorization

Here’s an example of a mileage log using Microsoft Excel.

Mileage log and expense report - employee reimbursement

Mileage log and expense report – employee reimbursement

Note that in this example, the employee drove from the office to a client and then back to the office. Therefore, there is no need to deduct commuting mileage.

But suppose, like in our example from above, that on Fridays the employee drives from home to the client’s location and back home. His mileage log would look like this:

Mileage log and expense report example - employee reimbursement

Mileage log and expense report example – employee reimbursement

But what if in this example, the drive to the client’s office from the employee’s home was shorter than his regular commute? In this case there is nothing to reimburse and the employee enjoys the benefit of less driving.

What would happen if this same employee didn’t normally work on Fridays or he always worked from home on Fridays? Then the entire drive to the client’s office would be reimbursable since the employee’s normal work schedule didn’t require him to commute on Fridays.

Many employees will forget to deduct their normal commute from mileage reimbursement requests. You’ll want to remind them.

Direct Expense Reimbursement of Travel Expenses

For employees who travel frequently, providing them with a company credit card is ideal. But for those times when an employee must use their own money for business expenses, you’ll want to reimburse employees quickly.

For easy recordkeeping, have employees complete expense reports when seeking reimbursements. Like the mileage log, it will detail who incurred the expense and when, what it was for, and the amount.

You can reimburse your employees with cash; however best practices would be to pay with check or some other trackable means, like ACH.

Here’s an example of an easy expense report in Excel.

Travel expense report - employee reimbursement

Travel expense report example – employee reimbursement

For each expense, the employee should include receipts to support the amounts requested.

Receipts for purchases should contain the amount, date, place, and a brief description of the expense.

For example, hotel receipts should include:

  • The name and location of the hotel.
  • The dates stayed.
  • Separate amounts for charges (i.e. lodging, meals, or food).

Restaurant and meal receipts should include:

  • The name and location of the restaurant.
  • The names of people in attendance.
  • The date and amount of the meal.

You may choose to reimburse employees for meal tips. Be sure to have a clear policy of what will be reimbursed and what will not. For example, you’ll reimburse up to 20% for tips. Anything above that will not be reimbursed.

You’ll also need to consider your policy for lost receipts. You can still reimburse but have the employee fill out a missing receipt form to document the expense.

In lieu of direct expense reimbursement, consider using a per diem.

A per diem provides the employee with a specified dollar amount per day to use on meals, snacks, lodging, or other miscellaneous purchases. Larger expenses like airfare would be paid using the direct expense reimbursement method or paid for directly by the company.

Per diems should be prorated for partial days of travel. Acceptable methods include the ¾’s method or any other method you choose that is reasonable.  The ¾’s method adds ¾ of a daily per diem rate on departure days and another ¾’s on return days.

The IRS sets per diem rates for cities and metropolitan areas. More expensive locales have higher daily rates than cheaper cities. For example, the daily rate for high cost cities like San Francisco, Vail, Colorado, and Nashville, Tennessee is $297. And many cities are designated high cost for only portions of the year. Miami and Park City, Utah are considered high cost only from December 1 – March 31.

And if you’re not in a high cost city, the daily rate is $200. These per diem rates are often updated each year. So you’ll always want to check for the current rates.

For example, Dave is travelling to Seattle for business. Seattle is a high cost locale. He’s leaving on Monday and returning on Thursday. Seattle’s maximum per diem rate is $297 per day. Dave will receive $222.75 ($297 x ¾) for Monday and Thursday and the full $297 for Tuesday and Wednesday.

Per diems are not taxable income to your employee if you use the IRS rates and your employee provides an expense report with receipts. However, using higher rates will create taxable income for the amount above the federal rate. And not submitting an expense report and receipts will make the entire per diem taxable because you’ll have an unaccountable plan and your company will not have the required receipts to support the tax deduction.

If your business operates in the transportation sector (i.e. shipping, trucking, or rail, etc…), it’s important to note that there are different per diem limits and rules you must follow.

Entertainment Expenses

With the 2017 Tax Cuts and Jobs Act, entertainment expenses are no longer tax deductible for companies.

As an employer, you may still reimburse your employees for entertainment expenses; however, these reimbursements will need to be segregated so that they are not included on your tax return. Examples of entertainment expenses include tickets to entertain clients at sporting events or country club fees for golf memberships.

What documentation you require for entertainment reimbursements is up to you but best practices suggest following the same requirements for travel or mileage reimbursements.

Commingling

If travel or meals involve both a business and personal aspect, only the portion of the expense that is business related is reimbursable.  Expense reports and receipts should indicate whether there are any personal expenses.

For example, an employee makes a business trip to California from Georgia and elects to stay two days after business is finished for a mini-vacation. Best practices would have the employee check out of his hotel room and check back in using his personal credit card to pay the hotel bill for his extended stay. This way he has two different receipts; one for business and one for pleasure. However, if he doesn’t do that and the entire hotel stay is charged on the same receipt, you’ll need to back out the charges related to his personal stay.

None of this information should be taken as legal or financial advice, nor should it deter you from seeking the assistance of a licensed attorney, accountant, or financial services professional. But if you want to make sure your company’s policies for employee reimbursements are consistent with best practices, implementing these policies is a great place to start!

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What to Know About Travel Expense Reimbursement + Templates

The best way to establish an accurate reimbursement strategy for your employee and your company is to ensure that you have an expense reimbursement policy in place and that it is covered with all applicable employees during the onboarding process.

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Caryl Ramsey

Published on

June 2nd, 2023

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Shoeboxed is an expense & receipt tracking app that helps you get reimbursed quickly, maximize tax deductions, and reduce the hassle of doing accounting..

Employers and employees should understand the business’s guidelines for  T&E  or travel expense reimbursement policies so that neither runs into any issues over business-related expenses down the road.

The IRS is pretty flexible with employers when it comes to employee reimbursement for business travel expenses while away on a company trip.

Table of Contents

Does travel expense reimbursement qualify as a deductible travel expense?

What the IRS is not flexible about is whether or not the travel-related expenses incurred on the business trip qualify as a deductible travel expense.

Employers can deduct “ordinary and necessary expenses” of employees traveling away from their tax home.

According to the IRS, any reimbursement that does not qualify as a deductible travel expense is considered employee wages.

What are “accountable” and “non-accountable” plans?

There are two methods for reimbursing workers for expenses incurred when traveling for business. These are the “accountable plan” and the “non-accountable” plan.

An “accountable plan” is based on the Internal Revenue Service’s guidelines for reimbursing employees for the actual travel costs so that the reimbursable expenses incurred are not counted as income.

This means that the reimbursements are not subject to W-2 reporting or withholding taxes.

The expenses, however, must be business-related. To qualify for the “accountable plan,” expenses must be business-related, reported accurately, and excess reimbursements issued.

If the company’s reimbursement process doesn’t meet the guidelines under federal law for the “accountable plan,” then the expenses fall under the “non-accountable plan.”

If a reimbursed cost is non-accountable, then it is subject to being taxed as part of the employee’s compensation, therefore, it must be reported on the W-2 form and is subject to withholding.

What is travel expense reimbursement?

Travel expense reimbursement is when you pay employees back for business expenses incurred while traveling.

The expenses that are reimbursed are dependent upon the reimbursement policies determined by your business.

A travel reimbursement policy should be set up by your business that specifies the rules and procedures regarding reimbursement for travel-related expenses.

Many companies are using traditional expense management systems where staff can use a credit card and submit refunded trip expenses after the trip ends.

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What common types of travel expenses qualify for deductible expense reimbursement?

As an optional reimbursement provider, you have a choice on whether or not to  reimburse employees for travel expenses .

Regardless, a clear reimbursement policy should be established within the company.

Some of the most typical reimbursable expenses include the following:

Transportation costs between your home and the business destination

Transportation between airport/station and hotel

Transportation between the hotel and the work location

Sending company-related supplies from your regular work location to your travel work destination

Business use of a rental car or the actual expenses of operating your personal vehicle when traveling away from home on business such as mileage reimbursement

Lodging and meal expenses

Dry cleaning and laundry

Business communication expenses

Business related tips

Parking fees and tolls

How do expense reports play a role in a business’s expense reimbursement policy?

To prevent fraud and to keep company records updated and accurate, companies should  use expense reports  as part of their expense reimbursement policy.

The expense report should be used by employees to report incidental expenses such as travel expenses, business meals, and small purchases of supplies or equipment for the office.

Employees fill out these expense reports, which require the information of a typical transaction.

Some of the information found on an expense report include the vendor’s name, date paid, expense description, amount paid, and totals for each expense category .

Then the expense report is submitted to the company and according to the reimbursement policy, the employee is reimbursed.

See also: Expense Report Template Google Sheets: 4 Free Templates

Receipt requirements

It’s important to always have proof or documentation of the expenses that you incurred. The best proof is to provide the original receipt from the store, merchant, or a  receipt book .

Therefore, when turning in an expense report, always attach any  supporting documentation such as your receipts  to the expense report.

This safeguards the company against  expense fraud  and ensures that the company will have the documentation needed for tax deductions and any  audits  if requested.

Processing expense reports for travel reimbursements

Once expense reports are submitted to the company, the company is responsible for the accuracy of the expense reports.

The company has an obligation to check the expense report against its business travel and reimbursement policies.

This is meant as an assurance system for ensuring accurate compliance with corporate policies.

Deadlines for expense reimbursement

Businesses should establish monthly or quarterly deadlines for expense reports. This ensures that the business can claim the expense as a tax deduction.

It also ensures that records are kept more accurate and up-to-date, that an expense doesn’t fall through the cracks, and that the company maintains a more efficient cash flow.

Not only should there be a deadline for the employee to submit an expense report, but there also should be a deadline for when the employee will be reimbursed by the company.

4 Free travel expense reimbursement form templates

Whether you’re a new business looking for an easy way to keep up with eligible travel reimbursements or an employee that often travels for work, these free travel expense reimbursement form templates are a great way to record travel expenses and separate them from non travel reimbursements.

1. Hloom free travel expense reimbursement spreadsheet

Hloom free travel expense reimbursement spreadsheet for Excel.

Hloom free travel expense reimbursement spreadsheet for Excel.

Hloom offers a  free travel expense reimbursement spreadsheet  that you can use to report any travel expenses made while away on a business trip.

Employees’ travel expenses should be recorded in a concise, organized template so it’s easy to categorize eligible reimbursement claims, see if expenditures were within spending limits, and receive reimbursement all by looking at a single form.

Use this template to record:

The date, time, and location you traveled to

The meals you ate

The cost of lodging

Cost of transportation

Private vehicle license

This template is 100% free and customizable, so you can adjust the columns as needed to suit your company.

2. GeneralBlue simple free travel expense reimbursement form

This  free travel expense reimbursement form by GeneralBlue  is as easy as it gets. It’s an Excel template with 8 columns for recording the expenses incurred traveling for business.

With this straightforward form, you can record:

The date you traveled

A description of your trip

The cost of transportation

The cost of hotels

The cost of meals

Miscellaneous expenses

The total amount of travel expenses

There is also a line for employee and approval signatures so you have an official record of travel expenses and reimbursements.

3. U.S. General Services Administration travel expense reimbursement template

Travel expense reimbursement template from the U.S. General Services Administration.

Travel expense reimbursement template from the U.S. General Services Administration.

For state employees, the U.S. GSA offers a  free travel expense reimbursement template  that you can use to record spending while out on state business.

This template has everything an employee would need to record official business expenses, including:

Department or establishment

Official business categories

Mileage, including fare or toll

Date traveled

Additional persons

Tips and miscellaneous expenses

Spaces for authorizing signatures

The U.S. GSA travel expense template has to be printed and written as a paper copy.

4. Vertex42 travel expense reimbursement sheet

The  Vertex42 travel expense reimbursement sheet  is available for free and can be downloaded as an Excel file or Google Sheet.

This expense report includes:

Description of travel

Air and transportation costs

Fuel and mileage costs

Conferences and seminars

Meals and tip costs

Entertainment

Other expenses

The total cost of expenses

There’s also a place for authorized signatures, department, manager name, employee ID, and more.

Bonus: Shoeboxed for receipt tracking and expense reports

Turn Receipts into Data with Shoeboxed

Use Shoeboxed to capture your receipts and create detailed expense reports for reimbursement.

If you don’t want to deal with the hassle of keeping up with your receipts, manually inputting the expenses into a spreadsheet, or printing out an expense report for your boss,  Shoeboxed  can help!

Tracking receipts with Shoeboxed

Shoeboxed  is a great  travel management software  that allows you to snap photos of your receipts, digitally extract the important information, and categorize the expenses so that they’re easy to find and manage in your Shoeboxed account.

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Use Shoeboxed’s Magic Envelope to ship off your receipts and get them back as scanned data in a private, secure cloud-based account. 📁 30-day full money-back guarantee!

Creating expense reports for business travel expenses

Once your receipt details are uploaded to your  Shoeboxed account , you can select the receipts you want to put in your expense report and either export, print, or email them to the appropriate authority.

Shoeboxed will then create a detailed and organized  expense report  with images of your receipts attached so you can get reimbursed!

And if you didn’t think it could get any better, Shoeboxed also offers a  free mileage tracker  so you can effortlessly calculate business mileage and add it to your expense report.

Frequently asked questions

Can i get reimbursed for travel expenses.

The IRS offers two plans for reimbursing workers for travel expenses that are deductible: 1. Employers don’t have to pay employment tax by not including the reimbursement for travel-related expenses from the worker’s wages with the accountable plan; or 2. Employers will have to count all payments to workers as wages under a non-accountable plan.

What are travel reimbursements?

Travel compensation consists of reimbursements for out-of-pocket expenses by employees when they travel for work. The employee typically fills out an expense report and turns it in to the employer. Your employee’s costs will be affected according to your company and reimbursement policies. Travel insurance policies provide you with guidelines for reimbursement of travel expenses.

How much travel expense can I claim?

During business travel the actual cost of transport is 100% deducted—whether it is a flight ticket, train ticket, or bus ticket. Similarly, renting a motor vehicle can make your travel expenses deductible.

In conclusion

The best way to establish an accurate reimbursement strategy for your employee and your company is to ensure that you have an expense reimbursement policy in place and that it is covered by all applicable employees during the onboarding process.

Providing an expense report template makes it much easier for the employees and for those processing the expense reports.

The expense reports will also help to maximize tax deductions, make the audit process much smoother, and ensure that the employee is being reimbursed the correct amount.

Caryl Ramsey  has years of experience assisting in different aspects of bookkeeping, taxes, and customer service. She uses a variety of accounting software for setting up client information, reconciling accounts, coding expenses, running financial reports, and preparing tax returns. She is also experienced in setting up corporations with the State Corporation Commission and the IRS.

About Shoeboxed!

Shoeboxed  is a receipt scanning service with  receipt software  that supports multiple methods for receipt capture: send, scan, upload, forward, and more!

You can stuff your receipts into one of our Magic Envelopes (prepaid postage within the US). Use our receipt app ( iPhone ,  iPad  and  Android ) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.

Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.

Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed.

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Turn business receipts into data & deductibles

Join over 1 million businesses scanning receipts, creating expense reports, and reclaiming multiple hours every week—with Shoeboxed.

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Per diem look-up, 1 choose a location.

Error, The Per Diem API is not responding. Please try again later.

No results could be found for the location you've entered.

Rates for Alaska, Hawaii, U.S. Territories and Possessions are set by the Department of Defense .

Rates for foreign countries are set by the State Department .

2 Choose a date

Rates are available between 10/1/2021 and 09/30/2024.

The End Date of your trip can not occur before the Start Date.

Traveler reimbursement is based on the location of the work activities and not the accommodations, unless lodging is not available at the work activity, then the agency may authorize the rate where lodging is obtained.

Unless otherwise specified, the per diem locality is defined as "all locations within, or entirely surrounded by, the corporate limits of the key city, including independent entities located within those boundaries."

Per diem localities with county definitions shall include "all locations within, or entirely surrounded by, the corporate limits of the key city as well as the boundaries of the listed counties, including independent entities located within the boundaries of the key city and the listed counties (unless otherwise listed separately)."

When a military installation or Government - related facility(whether or not specifically named) is located partially within more than one city or county boundary, the applicable per diem rate for the entire installation or facility is the higher of the rates which apply to the cities and / or counties, even though part(s) of such activities may be located outside the defined per diem locality.

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A Guide to Travel Expense Reimbursement Process

Table of Contents

Introduction

We live in a world where you can access multiple services anytime, anywhere, with a single click on our phones. You can now order food, book a hotel, rent a car, and perform other tasks successfully with just a smartphone and the internet. 

Business travel should be no different! You should be able to plan business trips with ease and receive travel expense reimbursements with equal ease. 

Travel expense reimbursement meaning

Surely, if you have friends, you know what reimbursement means. You pay on their behalf and they pay you back later! We know that in the “friend” scenario, it almost never comes back, but in travel expense reimbursement , your money comes back to you within a specific time limit. 

Today, in most organizations, reimbursement requests are entertained and processed manually or semi-automatically. Whether it is for employees or employers, this is nothing short of a nightmare. These manual processes are cumbersome and error-ridden, leading to long waiting periods. 

Does your organization suffer from the same travel reimbursement inefficiencies ? How long do employees in your organization wait before their expense claims are settled? 

It’s high time you switched to an agile system that can make your firm’s travel reimbursement hassle-free . Do you know that you can bring down the travel expense reimbursement cycle to 5 days or less? Read on as we deep dive into expense reimbursement .

Also, Read: A Guide to Travel and Expense Management

How does travel expense reimbursement work?

Travel expense reimbursement is the process of paying your employees back for the out-of-pocket expenses incurred during a business trip . The firm must reimburse the employee fully if the employee, during the business trip , had paid from his wallet for expenses such as travel, food, etc. 

Organizations globally verify the legitimacy of the expenses before reimbursing the employee. To do that, employees must submit a travel expense report with details of the actual cost . The line managers and finance teams then verify the report to ensure its legitimacy and compliance.

This entire process – if not automated – can take days or, worse, even months. Also, it can affect the employee’s productivity and negatively impact his morale – which will be reflected in his work! 

Is travel expense reimbursement mandatory for employers?

As per existing labor laws in any country, travel reimbursement is not mandatory. However, if employees of an organization travel for the company and spend out of their personal pocket during such travel, then the organization is obligated to reimburse such business travel expenses . 

To accommodate such expenses, organizations may consider providing a travel allowance for employees. On the other hand, on the provision of original receipts of expenses incurred, the amount may be reimbursed within a specific period (as decided by the organization).

How travel reimbursement benefits everyone ?

Here are some of the advantages of reimbursement: 

  • Faster reimbursements will boost employee morale . 
  • Travel expense reimbursement is considered business expenses that can be used for tax deductions.
  • It can also positively impact employee efficiency and productivity

Let us look at this in more detail as we analyze the benefits for both employers and employees.

Benefits for employers

There are multiple benefits to automating travel reimbursement in your firm. Here are some of them: 

1. Reduce errors

In traditional expense reporting and travel reimbursement processes , there’s a high chance of committing errors. The employee could make this error while submitting the expense report , the manager while verifying, or the finance department. Worry no more. Automation can help eliminate errors in these processes. 

2. Eliminate paperwork 

You can eliminate your firm’s mind-boggling amount of paperwork by automating the entire travel reimbursement process . Your supervisors and finance teams no longer have to go through a ton of paperwork and then approve or reject the report.

Instead, by automating the process, they can now view the reports on a single screen and approve or reject them with a single click. Thus, making the entire process quick and efficient. 

Quick Read: 5 Easy Steps to Paperless Expense Filing

3. Greater policy compliance 

Automation is your best bet if you aim for greater policy compliance rates in your firm. By automating the reimbursement process , you can prevent reports that violate your company’s travel policy from getting reimbursed. Furthermore, in most expense management software, if there are any policy violations in the report, the system will flag it and notify both the user and approver.

4. Increased visibility

Using automated software for travel expense reimbursement , you can get better visibility of where your funds are being spent. Additionally, using the system, you can accurately find the categories you’re overspending or under-spending. Centralized spend visibility gives you better control over your funds and helps forecast future expenses. 

Benefits for employees

Now, let us look at how a good travel reimbursement process helps employees too.

1. Lowers the personal burden 

When you have a good travel expense reimbursement process in place, your employees feel assured that personal money spent on business expenses will be reimbursed. 

Any delays in the process may force them to be conscious of their spending habits. This may affect their liquidity when it comes to other essential personal expenses . 

2. Stress-free travel

Structured travel expense reimbursement processes ensure that employees’ business travel trips are stress-free. They do not have to worry about reimbursement. 

Timely settlements ensure that despite some lag in claim settlements , employees feel assured that if they provide original documents in support of their expenses, expenses will be reimbursed. 

3. Makes expense claims easy

A simple yet complete workflow for travel expense reimbursement ensures that employees stick to procedures and expense policies . Employees prefer clear-cut rules and easy-to-follow procedures as this benefits them too.

Also, Read: Corporate Travel Management

What are reimbursable travel expenses?

Certainly, not all expenses will be reimbursed by your company. So, how do you know what’s acceptable and what’s not? 

In this case, a comprehensive travel and expense policy works like a guide!

a) What is travel expense reimbursement policy? 

A travel reimbursement policy of a company is an official document that specifies the rules and procedures for travel expense reimbursement. Here are some of the aspects a travel reimbursement policy typically covers:

  • Travel expenses your firm will cover
  • Travel expenses your firm will not cover
  • How employees should report expenses
  • How and when will employees be reimbursed

b) What to include in a travel expense reimbursement policy? 

Since the travel and expense policy covers all aspects of travel expense reimbursement . It must be your “go-to” document for any clarifications in this regard. 

Let us look at the types of expenses that are included in the policy.

1. Travel expenses

The travel expense policy must detail the expenses that your firm will cover. Here are some of the travel-related expenses that most organizations cover: 

  • Hotel accommodation
  • Meals 
  • Parking 

Make sure you mention the spending limits clearly, so the employees don’t overspend and end up not receiving reimbursement. 

2. Level of the employee

In some organizations, the level of the employee plays a significant role in the reimbursement process. In your travel policy, mention the business travel expenses you will reimburse at the employee level.

3. Non-employees

In some organizations, the travel policy states that employees can take their family and spouses along for the business trip. Some organizations also reimburse the expenses for the employee’s family members; if your firm is ready to do that, then state it in the policy.

4. Exclusions

In your expense policy, make sure you include the travel costs that will not be covered. This way, your employees will know where to spend their money. Here are some of the items that most companies do not reimburse:

  • Alcohol 
  • Flight and hotel room upgrades 
  • expenses incurred on family members
  • Non-policy compliant expenses 

5. Responsibility of employees

State all the steps your employees need to follow for reimbursement . In some companies, employees need to submit all the receipts along with their travel expense reports manually. On the other hand, in some companies, employees are required to submit it digitally. Make sure you add the reimbursement approval workflow into the policy. This way, your employees know whom to contact when reimbursement takes time. 

Mention the estimated time for the reimbursement to be reflected. This way, your employees will know when to expect the reimbursement. 

Employees’ daily allowance to cover business-related expenses is called per diem . Ensure you include per diem rates and other related information in the policy. 

So, that brings us to the question of what expenses are allowed and what are not.

c) Allowable expenses 

Here’s a list of all allowable travel and other incidental expenses that can be reimbursed: 

  • Transportation
  • Baggage fees
  • Laundry costs 
  • Visa charges

d) Non-allowable expenses 

All expenses that do not comply with your firm’s travel policies are non-allowable expenses. Also, personal expenses that employees incur are non-reimbursable . Here’s a list of non-allowable expenses: 

  • Personal mobile bills
  • Parking tickets and violations 

Also, Read: A Guide to Creating Corporate Travel Policy

Calculation of travel expenses for reimbursement

Calculation of travel expenses is an important aspect of expense management. Even if there are just a few expense claims, wrong calculations can have an impact. To avoid this, clarity on the process of calculation of travel expenses is essential.

Let us look at how to calculate travel expenses for reimbursement.

1. Calculate reimbursements using an expense report

A travel expense report is a document that contains a list of all expenses that the employee incurs during the trip. The sum of all those expenses is what constitutes the travel expense reimbursement amount. 

Travel expense reports may be submitted through manual or digital methods. Manual methods are time-consuming and prone to errors. Digital methods are quick and easy to use. So, both employees and employers benefit from such a process.

Want to know more? Check out our blog on travel and expense report

2. Authenticate claims

One of the most important stages is to authenticate the claims made for expenses incurred during travel for business purposes . Travel and expense policies clearly mention claimable expenses . The finance team must validate these claims by ensuring that they are compliant. 

For instance, they may cross-verify that amounts are within the permissible limits or that the mileage rate used is the right one for the employee (based on grade and other parameters).

3. Match expense amounts against original receipts

The next stage involves confirming that the expenses claimed were actually incurred by the employee, matching the actual expense (no fraud or padding), and proof of such expenses is attached to the expense report .

For instance, an employee may have claimed an amount and attached the original receipt for dry cleaning . A quick look at the policies may confirm that dry cleaning charges are not reimbursed by your company.

4. Settle claims

Once the above parameters are met and the claim is valid, you can settle the employee’s claim. For instance, for transportation costs , your finance team must verify that the employee has only claimed fuel costs (within permissible limits for their employment grade) where he has used a personal vehicle .

Then, you can either directly credit the employee’s bank account or use any other process that is followed in your organization. 

Also, Read: A Guide to Business Travel Management

Challenges in travel expense reimbursement

1. manual processes.

Manual processes are a big hurdle for quick and efficient travel expense reimbursements . From the time that an expense report is filed to when the claim is eventually settled, it crosses too many hands. It not only increases the time takes to settle the claim but increases the chances of errors or fraud .

2. Unclear travel and expense policies

Unless your travel and expense policy is comprehensive and clear, you are looking at problems and endless delays in expense reimbursements . You must simplify your travel and expense policy so employees understand it better and stick to the rules. Similarly, when the approval workflows are clearly defined and straightforward, the process is smoother and quicker. 

3. Complicated workflows

Complicated workflows can seriously hamper your travel expense reimbursement process . Whether you have linear or multi-layered workflows , it is important to keep them simple and straightforward. The clarity in the approval process goes a long way in ensuring that employees get approval quickly and the claims move to the next stage as quickly as possible. 

Best practices to streamline your travel expense reimbursement process

Looking to speed up the travel reimbursement process in your firm? Here are our best practices to make your company’s reimbursement process hassle-free .

1. Submitting expense reports on time

Delays in submitting expense reports are one of the important reasons for a slow employee travel expenses reimbursement process . To tackle this issue, set a deadline for submitting expense reports to which your employees must adhere. 

2. Follow an expense policy 

A clear and well-defined expense policy has multiple advantages. From reducing fraudulent claims to increasing the policy compliance rate to eliminating out-of-policy spending , expense policy can positively impact your reimbursement process . If you do not have an expense policy for your firm, we recommend formulating one to make the reimbursement process smooth. 

3. Implement an effective validation process

For the finance team, it’s arduous to go through each report and check for compliance. Due to this strenuous task, the chances of approving reports violating your policy are also very high. That’s why it’s always best to automate validation to speed up the process.

4. Automate travel expense reimbursement

By automating the travel expense reimbursement process , you can save both money and time for your organization. Additionally, automation can make the entire process quick and error-free . 

Also, Read: Expense Management Automation

Impact of automation on travel expense reimbursement

Do you know that organizations that have moved to an automated expense management system have quoted “ Reimbursing employees faster ” as the second biggest reason for digitizing T&E

When every other part of your business is being digitized, why ignore employee travel expenses ? 

Manual processes hinder productivity and are time-consuming. It is time to move to a simpler travel expense reimbursement process – for employers and employees. Now, reimbursing employees can be quick and easy. With an automated and efficient travel expense reimbursement system, you can

  • Save on several hundred man-hours dedicated to authenticating and reconciling corporate travel expenditures.
  • Digitally access travel expense data in real-time allowing your finance team to spend time on other critical parts of your business.
  • Perform expense tracking digitally and access data instantly for better reporting and analysis. 

Essential features in an ideal travel expense reimbursement system

According to a 2020 Forrester study, 30% of finance leaders in top firms are unhappy with their T&E solution. Therefore, before zeroing in on a travel reimbursement system , here are the things you should look for: 

1. It has an advanced OCR technology 

Manually filling expense forms with data from invoices and receipts is a thing of the past now. Thanks to optical character recognition in most expense software , your employees now just have to click the receipt picture. OCR will then automatically capture the invoice data and create an expense. 

2. It should auto-capture expenses from all sources

Let’s accept it, manually filling out expense forms requires a special kind of superpower. Pick an expense software that auto-captures expenses from multiple sources like emails, SMS, credit, and debit card statements, TMCs, etc. 

3. It can detect non-policy-compliant expenses 

An efficient travel reimbursement system must automatically detect expenditures that do not comply with your company’s T&E policy and notify you. Thus helping you in maintaining a higher compliance rate. 

4. It has the best UI 

Spare your employees from using automated systems with an old, cluttered user interface. Instead, pick software that has the best and easy-to-use UI. 

5. GST compliance

Pick a T&E system that makes your firm GST compliant and allows you to claim ITC for all booking and expenses. 

Also, Read: 10 Best Travel Management Software

Simplify your travel expense reimbursement with Happay

If you’re looking for the best automated T&E management system to make your firm’s expense reporting and reimbursement process robust, your search ends with Happay . Known as Asia’s #1 T&E management solution for India’s conglomerates, we offer a complete paperless expense management solution with incredible cost savings.

Here are some of the key features of Happay: 

  • You can offer a superior employee experience for your traveling employees and become a tech-savvy employer to attract the best talent in the industry.
  • We offer 100% visibility as you enjoy better predictability and control over your T&E budget.
  • Whether it is international or domestic , employees can self-book flights and hotels in one user-friendly app on mobile or the web. Pre-spend violations , real-time reporting, and policy configurations can be customized and are included in the system’s architecture.
  • File travel expenses on the go using the in-built OCR technology in Happay
  • Happay auto-captures expenses from email, text messages, credit card statements, and other sources. 
  • Automate per diem based on expense data
  • Happay’s GST return module can help gather all your GST data in one place. Save more on your travel spending with accurate ITC claims

And the benefits do not end here. Want to know more about Happay? Schedule a demo with us today. 

Travel expense reimbursements are always a sore point for employees as it is associated with emails back and forth along with long wait times. However, it does not have to be so. 

Apart from numerous other benefits, automated expense management solutions ensure that the turnaround time for travel expense reimbursements is short. As employees enjoy the quick settlements, finance teams can stay stress-free as reconciliations and other reporting are insightful and automatic. 

In most companies, for travel expense reimbursement, employees must submit expense reports along with proof of expenses.

As long as the reimbursement is for expenditures incurred for the organization, such expenses are not taxable income. Whether it is an allowance included in the income is a question that can be answered by looking at the employee’s individual salary details.

Here are a few expenses that businesses reimburse:  a) Air ticket/ train fare b) Cab fare  c) Meals during the travel

Since travel expense reimbursement is not an income for the employee, it need not be reported as income by the organization too.

Related Posts:

  • 10 Best Travel Management Software and Systems in 2023
  • Corporate Travel Management: The Business Guide
  • 10 Best Corporate Travel Management Software in 2023
  • The Ultimate Guide to Travel and Expense Management…
  • A Guide to Creating a Corporate Travel Policy 2023…
  • Corporate Travel Program: Why Does Your Business Need One?

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Everything You Need to Know About the Business Travel Tax Deduction

Justin W. Jones, EA, JD

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

  • Mostly business
  • An “ordinary and necessary” expense
  • Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

  • Makes sense given your industry, and
  • Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

  • What's your main place of business, and
  • How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

  • Live with your family in Chicago, but
  • Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

{upsell_block}

🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

{write_off_block}

Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

  • Is an employee,
  • Has a bona fide business purpose for traveling with you, and
  • Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

  • Gym or fitness center fees
  • Movie rental fees
  • Game rental fees

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Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

  • The deduction was not legitimate and shouldn't have been claimed in the first place, or
  • The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

Justin W. Jones, EA, JD

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Detailed guide on travel expense reimbursement

Business travel expense reimbursement is an essential expense for any company. You must ensure that the reimbursement system of your company is automated and streamlined to deliver increased productivity and help save time for the employees to work on other human-centric tasks.

Manual travel expense reimbursements processing and reporting has numerous errors that, in turn, cost the company more hours spent on fixing the mistakes.

An automated system saves the company any extra effort or money spent on error correction, long reconciliation processes, and data management. A complete travel and expense automation system will help your company establish a streamlined travel process without having to worry about reimbursements.

What is travel expense reimbursement?

Travel expense reimbursement is the process of compensating your employees for all the business expenses made during any work trip. The employees are reimbursed for all the travel expenses that they have to make out of their pockets. These valid compensation expenses include travel tickets, meals, hotel reservations, and any purchases made for the clients. 

To get reimbursed, employees are supposed to collect all the physical receipts and any other documents as proof of the spending and submit those to the finance department.

Every company has its own reimbursement claim submission system. Once the employees give in claims, the finance department checks all the receipts with other documents and ensures that everything is in compliance with the company travel expense policy . According to that, the finance department approves or rejects the claims.

What is the purpose of the travel expense reimbursement process?

Travel expense reimbursement process is essential because business travel expenses can be heavy on the employees’ pockets. It is not the employee's obligation to utilize their personal funds to pay for the business trip. It is the responsibility of every organization to reimburse its employees for any out-of-pocket expense made for the business. 

If your company takes reimbursement seriously and timely completes the process, your employees will be happy to for in the company. Satisfied employees mean smooth business functioning.

 Along with this, reimbursements are categorized under business expenses that are viable as tax deductions. Plus, having a reimbursement process makes it easier for the finance department to settle all claims, and you get greater visibility into the expenses of the business.

What are the travel expenses that are reimbursable?

Reimbursable travel expenses

1. Transportation expenses

The first and essential travel expense, transportation cost, has to be reimbursed. All kinds of transport used on the business trip are supposed to be in the reimbursement claim. These include train or flight tickets, public transport in the city, car rental costs, or ride shares.

 Employees must have valid transport expense proof like ticket copy, payment receipts, etc., as proof of transaction.

2. Accommodation expenses

Business travel expense reimbursement also includes accommodation expenses. Hotel or any other accommodation place charges, valet or parking expenses, internet or sim fees, etc. You can always set expense limits so that your employees know what can be booked inside the budget. This help in sidestepping the problem of overspending. 

3. Business-related entertainment expenses

Another category considered under corporate travel expense reimbursement is business-related entertainment expenses. These are costs employees have to incur to keep the clients or potential clients entertained and engaged. This can be social events, concerts, dinner parties, etc.

Also, if the employee spends on food, drinks, and other refreshments for the clients, those are also reimbursed. 

4. Meal expenses

If the employees buy meals for themselves or any refreshments, those are also supposed to be reimbursed by the company. These meals can be for themselves or for the clients. Daily meals can be counted under the per-diem expense of the employee as well. The daily allowance given to a travelling employee is called the per-diem expense. 

5. Incidental expenses

Incidental expenses are those minimal costs incurred apart from the major costs of traveling. Room service charges, tips to hotel staff or chauffeur, customer gifts, laundry service charges, etc. These expenses can be reimbursed after the trip. 

Experience hassle-free reimbursements

What is a travel expense reimbursement policy.

In general, a travel expense reimbursement policy is a document that has all the details and guidelines related to your business travel expenses reimbursement.

It should have enough information regarding everything starting from pre-travel planning to reimbursable amount settlements. Typically, you would also want to include details such as what types of travel expenses are and are not considered reimbursable.

Any hard limits you have on the amount that your company will cover should be stated as well. Procedures such as expense reports and approvals will also make it onto your travel expense reimbursement policy.

How to create a successful travel expense reimbursement policy?

There’s no reason to confuse your employees, especially when it comes to a policy that they’ll have to reference a lot.

 Having a simple travel expense reimbursement policy that is easily understandable by all employees will streamline all processes involved.

2. Comprehensible

Your policy for travel expenses reimbursement is no good if your employees have no clue how to follow it. You want your travel expense reimbursement policy to have plenty of details about the different steps involved while keeping it user-friendly.

3. Structured

Considering that there are a lot of details on travel reimbursement that you want to include, it’s important to maintain your policy and keep it neatly structured. This way, it’s easier to make changes and adjustments if necessary.

What to include in a travel expense reimbursement policy?

1. expense categories.

As mentioned, there are different types of expenses that will be incurred during business trips. This includes transportation expenses, lodging expenses, client entertainment expenses, and many more.

You’ll want to break down which expenses fall into what category in your travel expense reimbursement policy to provide clarity to your employees.

2. List of expenses that are reimbursable

Make a list of what expenses are applicable for travel reimbursement. While the details may differ from company to company, reimbursable expenses typically include transportation, accommodation, meals, client gifts, visa charges, and other business-related expenses.

Make sure that your employees know who the right person to ask is for expenses that they’re unsure about.

3. List of expenses that are non-reimbursable

Any personal expenses incurred by your employees during the duration of their trip are not reimbursable. This means that should an employee choose to do any personal shopping, those expenses will not be allowed for travel reimbursement.

Any travel upgrades your employees choose to get that are outside of the initial travel budget will also not be reimbursed.

4. Taxes on expenses and reimbursements

You want to be sure that you comply with tax regulations regarding your travel expenses and reimbursements. Note that employee allowances and reimbursements are two separate things.

For tax purposes, ensure you are aware of the differences and what your obligations are for paying travel expenses reimbursement specifically.

5. Budget for each expense category

To make sure that you don’t get an inflated number when your employees submit their reimbursement claims at the end of each business trip, you want to create a daily budget for each expense category.

This daily allowance is called per diem. Specify what the per diem rates are to encourage employees to stay within budget.

6. Specify the receipt and documentation requirements

Every company will have its own reimbursement claim requirements. While some might only require an upload of the receipt, others might want more details and supporting documents.

Make sure that when you create your travel expense reimbursement policy, you’re clear on what your reimburses need to get the travel expenses reimbursement claims processed.

7. Reimbursement plan

To make sure that everyone involved in the travel reimbursement process is on the same page, you want to include a section about how you plan to do reimbursements.

This makes sure that everyone’s expectations are aligned with one another. You also want to outline what are the responsibilities of everyone involved and what is involved.

8. Fraud and policy compliance

At the end of the day, a travel expense reimbursement policy is written to have everyone in your company adhere to it to ensure compliance and develop standardized processes.

It’s important that you outline a section about policy compliance and what the consequences are for deviating from the policy or fraud attempts.

Reimbursement made simple

What are the steps of a travel reimbursement process.

Travel reimbursement process

1. Pre-travel approval

Before travel expense reimbursement comes pre-travel approval, employees are supposed to submit a request and all related documents for the trip. This request mentions all the details of the travel, like place, time, dates, purpose, expense budget requirement, etc.

 It is essential that your company has a requirest template or set system through which the employees put in their travel requests and get approvals. 

2. Expense guidelines and policies

Once the employee travel request is submitted, the company is supposed to process the further details. You have to give the employees expense guidelines, a list of all reimbursable expenses, clarity on reimbursement policies, and an approved expense budget. This is done to ensure that the employees have a clear understanding of everything that is allowed and the expense policy limits. 

3. Expense documentation

While the employees are on a business trip, it is essential that they document every expense. Receipts of meals and drinks, client entertainment activity receipts, travel tickets, hotel reservation and stay documents, etc. All these have to be collected and stored. These receipts and documents are then attached while claiming reimbursement. 

4. Expense report preparation

When the employees come back from the business trip, they are supposed to prepare a report of all the expenses incurred during the trip. This report has to include details of all the expenses, like category, amount, merchant, etc.

Along with this report, the receipt of the purchases is attached. The finance department collects these reports and calculates the total reimbursements. 

5. Review and approval

The finance department scans every detail and matches the claim amount to the original receipt attached. This is done for extra ensure that all expenses are legit and everything is in compliance with the company expense policy.

Plus, sometimes, employees slip extra expenses into the expense report . The finance team has to make sure that every expense has a document proof of it. Once checked, the reimbursement is approved.

6. Reimbursement processing

Once all the details are sorted and the reimbursement claim is approved, the next step is to process the amount. The reimbursement amount is usually given to the employees along with their salaries. 

7. Reconciliation and reporting

After everything is done, travel expense reimbursement is added to the accounting sheet. All the details are rechecked, and reconciliation is initiated. Every expense is recorded, and then all necessary data is put into reports to maintain a database.

Suggested read: What is account reconciliation, types, benefits and procedure

How to streamline your travel reimbursement process?

Have a well-defined reimbursement policy.

Streamlining your travel reimbursement process starts by preparing a reimbursement policy. This must be easy to understand and should be distributed amongst all employees.

A comprehensive business travel expenses reimbursement policy must include things like reimbursable and non-reimbursable expenses, dates and guidelines to submit expense claims, deadlines, etc.

Along with this, mention the rules for pre-approvals and how the claim amount will be transferred. A clear understanding comes with a comprehensive reimbursement policy.

Digitize expense management

Another effective technique to streamline your travel reimbursement process is to digitize the travel and expense management process . A centralized system can help you track and process all travel expenses. The system must allow your employees to easily make reimbursement claims, make submissions, and track the process.

For example, these systems give employees the facility to click a picture of their receipts and upload it through a mobile application instantly. Plus, a digitized system also keeps a record of all the activity and data, and this database can be accessed easily.

Timely submissions of expense reports

It is advised to set reimbursement submission deadlines. Encourage your employees to submit all their claims on time so that the travel expense reimbursement process can be completed quickly.

If they delay their submission, the process will also be delayed, and ultimately employees won’t get their reimbursement amount on time. Put out reminders and be strict with your employees to complete the process on their end within the given time. 

Provide training and support to employees

Your employees will not just magically get acquainted with the process and guidelines. It is important to set up training sessions. These training sessions should educate the employees on the company’s expense policies, how to make expenses when on a trip, and how to file for reimbursements the right way.

Along with this, also put together a support team to help the employees with any kind of queries, problems, and issues while traveling or filing the claim. 

Streamline review and approval workflows

Employees have to run around to get approvals, and the finance department is behind the employees to submit their claims. This is a never-ending cycle. Instead, you should streamline the approval workflows.

Using an expense management system can automatically check the receipts and claims and flag expenses if suspicious. Along with this, these systems allow you to set a chain of approvers who will receive the summary of the claim and, with just one claim, can approve the reimbursement easily.

Conduct regular audits

Last but not least is to conduct regular audits. It is crucial to always be on of all the expenses and have a clear understanding of all the money being spent on reimbursements.

Ensure to keep a tab on all the processes and check if everything is running smoothly.

 Auditing regularly helps you to have a clear understanding of the business reimbursement spends and provides data to make any changes in the policies and process for better-streamlined expense management. 

Take control of your expenses

Benefits of streamlining travel reimbursement process using an automated system.

It is not a hidden fact that now with easy digitization and automation in the picture, manual processes can be time-consuming and extra effort-taking in comparison to automated systems.

Hence, why stay behind?

An automated travel expenses management system can help you save a lot of time and complete the same processes that took humongous efforts in just a few minutes. Along with this, the system quickly checks every detail and flags any unusual activity or expenses. 

A travel expenses management system is easy to use and gets the job done faster. Reconciliation with the accounting books becomes a piece of cake. Moreover, managers can access all expense data in real-time, and the finance team can easily work around the instantly available information.

 Ultimately, with everything available and done with just a few clicks, analysis and reporting also becomes effortless. 

Benefits for the employer

● Accurate financial records

Manual business travel expense reimbursement process is highly prone to errors. There are various mistakes the employees, the managers, and the finance team can make while submitting, checking, and reconciling travel expenses. However, an automated system takes over the whole process. Your employees just have to upload the snapshot of their expense receipts, and the rest will be done by the system automatically. The managers also just have to approve or reject the reimbursement request summary shown on their screens. 

● Enhanced expense reporting and analytics

How much time does your whole team take to compile all expense data, categorize and sort it to make a meaningful report? Probably days! Just imagine all required data being available with just a few clicks. This is what expense reporting automation does for you. It tracks, records, and collects all expense data in real-time and instantly organizes it into meaningful reports that can be accessed anytime. Using this, you can implement changes and make other decisions rather quickly. 

Master the art of expense tracking . Delve into our insightful article to learn effective strategies for tracking expenses, and gaining financial visibility.

● Help eliminate paperwork

It takes tons of paperwork and approvals to get just one business trip approved, managed, and reconciled. Employees and managers both have to go through huge lumps of documents to record everything and to ensure that the travel reimbursement process is completed with accuracy. But why not eliminate all this hassle and automate the travel expenses management process? It automatically processes the data and reports, and the managers just have to click approve or reject on their screen, making the process easier and quicker. 

● Ensure greater policy compliance

Policy compliance is the most difficult to maintain in an expense reimbursement process. However, automation solves this problem also. Any expense claim that is not in compliance with the company policies and rules will automatically be rejected. The claim will not go further for reimbursement processing if the expense amount or category or any other requirements do not match the company policy. Hence you no longer have to worry about expense fraud! 

● Time efficiency and cost savings

The ultimate motive for getting travel expenses management automation is to help your company save time and money. All those hours spent on making expense reports, filing reimbursement claims, checking all the paperwork, getting approvals, and reconciling with the accounting books can be reduced to just a few minutes with automation. Plus, all the extra costs spent on error correction and overtime for completing the process can be eliminated with automation. 

Benefits for the employees

● Increased trust and satisfaction

When your employees are reimbursed quickly, and the process is easy and convenient; they will build a sense of trust and satisfaction towards the institution. This convenience and ease can only come through the automation of the travel expenses reimbursement process. Employees just have to upload snapshots of their receipts, and the system will take care of the rest. 

● Faster reimbursement (Lowers the personal burden)

Again, the automation system will complete the reimbursement process faster than the manual processing time, so your employees will not have to worry about being short on personal finances or will not have to bear any burden of their personal funds. Faster reimbursements keep your employees happy. 

● Easy expense claims

With an expense management automation system, your employees can easily raise reimbursement claims , track the process, check the status of their claims, and finally be updated on when their reimbursement is approved and transferred. Along with this, the system will allow them to follow a clear-cut process without much hassle and documentation requirements. 

● Stress-free travel experience

Once you have proper reimbursement and travel expense management structure in place, your employees will not have to worry about reimbursements. Stress-free travel experience for your employees. A proper system assures that if the employees provide evidence for all expenses and file their claims correctly, they will be compensated no matter what. 

Key features to have in an automated reimbursement system

User-friendly interface.

What use is an automation system if it takes weeks to learn how to use it and has a complicated user interface? Instead, get automation software that is easy to use.

 Employees and managers both should be able to quickly grasp the working of it and should be able to use it to the fullest. All features must be effortlessly accessible on the dashboard so that skimming through for information doesn’t take long.

Mobile accessibility

The automation software you choose to integrate with your existing ERP system must have a mobile application version. While traveling, employees might not necessarily have their laptops or access to a PC.

So, a mobile version is convenient for uploading expense receipts instantly from anywhere, and also managers can approve expense claims easily. 

Receipt capture and storage

Another important feature necessary in an automated corporate travel expense reimbursement system is OCR technology. Optical Character Recognition technology captures essential characters from the uploaded receipt. These characters are amount, spend category, date, time, etc.

 Once captured, the system updates all that information into a centric database. This database is updated with new expense information in real-time. 

Automated calculation of reimbursements

Automation systems also offer the feature of automated calculation of reimbursements. As the system anyways does the whole reimbursement process, the end part calculator is not a difficult thing.

All expense claims are anyways recorded in the accounting sheets, everything is added, and a total can be derived just as easily.

Expense categorization

Expense management systems also provide businesses with the feature of automatic expense categorization. This means that as and when an expense is made, the system will automatically capture it and put it under the right expense category in the database and the accounting sheets.

Auto-categorization cancels out all the tedious labor put into just sorting and entering data. 

Approval workflows

Automation systems help businesses set up a smooth approval workflow. You can set multi-level approvers so that the reimbursement claim is checked 3-4 times by managers and other authorities before being passed.

This means that the expense claim request will be shown to the designated approvers of level 1, then level 2, and then level 3. Employees don’t have to go behind different people all day long to get the reports and claims approved.

Accounting system integration

One of the most important features to look for in an expense management automation system is integration with accounting software. Your expense management system must be flexible enough to integrate directly with your accounting software.

All expenses, when tracked in real-time, should also be entered into the accounting books in real-time. 

Policy compliance checks

Another must-have feature in a travel expenses reimbursement automation system is a policy compliance check. The software should not only process all the compensation claims but also should be able to flag and stop any claim that is not in compliance with the company policies and rules.

 You can enter all the required policy information in the system so that it can check the legitimacy of every expense against it. 

5 best travel reimbursement software for businesses

As an all-in-one expense management software , you can manage all business expenses with Volopay, including employee reimbursements. You can create expense categories for business travel for your own convenience.

Employees will then be able to file reimbursement claims from anywhere through the use of a mobile app in just a few clicks.

2. Zoho Expense

With Zoho Expense, you can make and manage online travel bookings. You can also manage offline travel-related needs, enabling you to make itineraries and travel profiles for smoother business travel.

 This way, tracking any expenses made during business trips will be simple. Easily pinpoint which travel expenses were made out of pocket and need to be reimbursed.

3. SAP Concur

SAP Concur offers a way to accurately track and report your business travel expenses hassle-free. Employees on business trips can snap pictures of expense receipts on the go, allowing you to keep all your travel expenses reimbursement data in one place.

 The reimbursement process can happen much faster when everything is easily accessible.

4. TravelPerk

TravelPerk is a travel management platform that helps you manage business trips and costs. You can collect all travel invoices through TravelPerk and employees won’t have to manually do expense reports.

 The platform allows you to view one invoice with all the details at the end of each trip, eliminating the need for paper travel reimbursement documents.

Fyle makes expense reporting stress-free for employees. Expense reports can be done at any time from anywhere with Fyle and will be reflected directly on the platform.

Every reimbursable expense is recorded on a centralized dashboard and can be filtered and viewed to make the travel reimbursement process go smoother.

Streamline your travel expense reimbursement process with Volopay

It is not impossible to find all the above-mentioned features in one platform. Introducing to you — Volopay! An all-in-one expenses management system created to help businesses save time and money that is normally invested in manually managing expenses and reports. 

With respect to travel expense reimbursement, Volopay gives ti customers the facility to set up a customized reimbursement process. With Volopay, you can set up multi-level approvers, get instant approval or rejection, OCR to recognize receipt characters, a mobile app for anywhere access, real-time expense tracking, and much more.

Optimize your expense management

Faqs on travel reimbursement.

For employees, reimbursements are treated are non-taxable income, and for the company itself, reimbursement expenses are tax deductible. 

An example of travel expense reimbursement is hotel reservations. The hotel your employees stay in during the business trip, the charges of that are reimbursable. 

An expense reimbursement policy is a set of rules and guidelines that are put in place to establish an expense structure and to educate the employees on how and what expenses are compensated. 

There is no period of time for reimbursements. Depending on the complexity of the company workflow, it can take anywhere between days to months. 

Travel expenses are broadly classified as reimbursable and non-reimbursable expenses.

Policy Library

Reimbursement for travel expenses - employees.

The purpose of this policy is to outline reimbursement of travel expense requirements for Georgia Tech employees traveling on behalf of Georgia Tech in compliance with University System of Georgia, State Accounting Office, and Georgia Tech policies.

All Travelers seeking reimbursement for travel expenses incurred for the performance of official duties must seek reimbursement via Georgia Tech’s financial management system. Travelers must obtain authorization to travel, via Spend Authorization, prior to traveling on behalf of Georgia Tech. Learn more about Authorization of Travel requirements here .

Expense Report Travelers are required to submit an expense report via Georgia Tech’s financial management system and to attest to the accuracy and completeness of their claim for travel reimbursement. Travelers must exclude any personal or outside professional activities. A Spend Authorization must be associated with the expense report in Georgia Tech’s financial management system to facilitate reimbursement for out of state travel.

The Traveler’s manager, cost center manager (or their delegate) and driver worktag manager(s) must review and approve or deny all expense reports. Travelers may not process or approve their own expense report. Approval of the expense report indicates that the travel expense was authorized, reasonable, allowable, and that the claim is complete and accurate. In no case is a subordinate authorized to approve an expense report for their supervisor or manager.

Travelers can only be reimbursed for their travel expenses and cannot be reimbursed for other Traveler’s expenses. State reporting of travel expenses requires that reimbursement to an Traveler covers only those expenses pertaining to that specific and individual employee's expenses.  

Receipts and Supporting Documentation

  • An official or formal written agenda which includes session times must be submitted with expense reports for conferences and seminars. 

Itemized receipts are required for the following:  

  • Air, lodging, and rental cars  
  • Visa/Passport fees  
  • Conference registration fees ( 6.11: Conference Registration )
  • Receipts are not required for meals (see policy 6.4: Meals and Incidental Travel Expenses )
  • Itemized receipts are not required for the following expenses, if individual amounts are less than $25:  
  • Gasoline purchased for rental vehicles  
  • Highway tolls  
  • Mass Transit tickets  
  • Taxi fares  
  • Airport vans    

A copy of a redacted bank statement may be required if sufficient document for a credit card payment is not provided. Travelers should remove or block any sensitive information (social security number, all but the last four digits of a credit card, etc.) on receipts and supporting documentation. Approvers should also review the documentation at the time of approval to ensure that all sensitive information is removed or blocked out. 

Attestation Travelers must attest that they are eligible for the requested reimbursement for performance of official business on behalf of Georgia Tech, and have not received nor will seek reimbursement from any other source for any of the expenses claimed. Approval of expense requests attests to the necessity of the travel and ensures that travel expenses are reasonable in nature and amount.

Expense Reimbursement Submission Timeliness Travelers should submit all expenses for reimbursement and reconciliation within 10 days of the completion of the event or trip but no later than 45 calendar days. Expenses submitted more than 60 calendar days after completion of the trip or event, if reimbursed, may be considered taxable income. See IRS publication 5137 for further details .  Expense reports submitted in excess of one calendar year after the date of travel may not be reimbursed. 

Travelers with small dollar reimbursement requests should wait to submit an expense request until the amount reaches $10. 

Travelers should consolidate expense claims for local parking, mileage, telecom and supply purchases into a monthly claim reimbursement.  

Travelers with Physical and/or Medical Conditions

The impact of travelers with physical and/or medical conditions, while on Georgia Tech travel, should be considered on a case-by-case basis. Georgia Tech requires full compliance with the Americans with Disabilities Act (ADA). Each department has the authority to provide reasonable accommodations for travelers with disabilities.  

All Travelers are to be afforded equal opportunity to perform travel for official business even if the travel costs for Travelers with disabilities will exceed what would normally be most economical to Georgia Tech. Examples include, but are not limited to: 

  • When a Traveler uses a wheelchair, it may be necessary for the Traveler to fly on a larger airplane that accommodates the wheelchair. In this case, there may be an increase in the cost of the airline ticket.  
  • When a traveler has hearing or vision impairments, there may be a cost of providing auxiliary aids and services to enable the traveler to successfully accomplish the purpose of the travel.  

The extra travel costs required to comply with ADA shall be documented and kept on file by the approver.

All Georgia Tech employees (faculty, staff, and students).

5.1.Traveler

The Traveler is responsible for ensuring appropriate spend authorization, supporting documentation and appropriate approval is obtained prior to the first day of travel. The Traveler is also responsible for ensuring any personal or external professional activities have been excluded from the reimbursement.  Additionally, the Traveler is responsible for declaring any external professional activities or vacation associated with a business trip, and reporting all external activities in the Conflict of Interest System. 

5.2. Expense Preparer

An expense preparer may book travel reservations on behalf of the Traveler and is responsible for ensuring appropriate spend authorization and all required supporting documentation is obtained prior to the first day of travel. The expense preparer is also responsible for verifying any personal or external professional activities are excluded from the reimbursement.  The expense preparer should also verify the Traveler has declared any external professional activities or vacation associated with a business trip and has reported all external activities in the Conflict of Interest System.

5.3. Approvers

Manager and supervisor, or their delegates, are responsible for:

  • Verifying the business purpose of the trip;
  • Verifying the trip is allowable;
  • Verifying the reasonableness of the cost of the trip;
  • Verifying the travel class is compliant with Georgia Tech and USG policies;
  • Verifying all required supporting documentation is submitted;
  • Verifying any personal or external professional activities are excluded;
  • Verifying any external professional activities declared by traveler are reported in the Conflict of Interest System.

Travelers who are in violation of this Policy are at risk of not receiving reimbursement for travel expenses.

To report suspected instances of ethical violations, please visit Georgia Tech’s Ethics Helpline, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508

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UPenn Travel & Expense Management

  • Air Travel Sustainability
  • Fly America Act
  • Handling Travel Emergencies
  • International Travel Guidance
  • Know Before You Go
  • Register Your Trip
  • Training Materials

Concur Expense makes getting reimbursements fast and easy!

Electronic expense report system for reimbursement of travel, entertainment and miscellaneous out-of-pocket expenses..

Concur Expense is now live across campus for all Faculty, Staff and Students.  This new system was implemented to streamline the travel booking and expense reimbursement processes for faculty, staff, and students who are conducting University business. The Penn Travel & Expense Management (TEM) team rolled out Concur Expense, the expense report submission module of the Concur Travel & Expense Management application, to each of the University departments, Schools, and Centers over the past few months.  An Advisory group made up of representative from the schools and centers will continue to offer feedback as users interact with the system.

Click the icon below to access the application.

Concur logo

Best Practice:

Complete and submit your expense report within 2 weeks of the trip end date or expense transaction date to ensure quick reimbursements.

The new Concur system offers a number of benefits to the University community including:

  • Streamlined electronic process for the submission, review, approval, and payment of expense reports;
  • Shorter cycle times for reimbursement;
  • Integration with the Penn Travel Card from Bank of America — reducing manual entry of expense data and enabling direct payment to the credit card company for approved expenses;
  • The ability for designated individuals to book travel and prepare expense reports on behalf of others;
  • Robust reporting and expense tracking;
  • Applications available for mobile devices;
  • Improved compliance with University policies – business rules are built into the system;
  • Ability to authorize students who travel or incur expenses on behalf of Penn to use the system; and
  • Optimal spend aggregation and improved rate negotiations with University providers.
  • Search for: Search Icon

about travel expenses reimbursement

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SSEC Travel & Expense Reimbursement

The SSEC Travel Office, located in room 349, is here to assist with the travel and expense reimbursement process and ensure compliance with all applicable state, University, and sponsor rules (see University Travel Policy – UW-3015 ).

Pre-Travel Preparation

Travel request form (trf).

Prior to booking any travel arrangements, the SSEC Travel Request Form should be completed, with PI/PM signatures and emailed to [email protected] as early as possible. The project funding must be reviewed to ensure the traveler has appropriate funding budgeted and available to cover the trip. Even if there’s a chance the exact travel dates may change slightly, it’s better to plan ahead and ensure the funding is approved –we can make some adjustments to the actual travel dates, if needed. Please allow 7-10 days for approval as we receive a large number of requests.

Concur Registration and Profile

  • All UW travelers must create a Concur profile Concur Account Administration . Initial account creation can take 24 – 48 hours.
  • You must have a current unexpired credit card added to your profile.
  • You should add Elise (Primary) and Melissa as Travel Arrangers
  • Frequent Flier Numbers
  • Flight, Hotel, and Rental Car preferences.

Concur is the online booking portal administered by Travel Inc. so the agents also use your profile to book, as well as the SSEC Travel office. Go to the Concur website at https://www.concursolutions.com/ to create an account or sign in. Concur/Travel Inc. must be used in order to be reimbursed for your flights.

International Travel

To help determine which foreign-travel expenses are reimbursable to UW–Madison travelers and what preparations need to be made for a business trip overseas, please review the UW international travel information: Planning a Trip – Traveling to a Foreign Country

Booking Travel

Plan your business-related trips with up-to-date information on travel contracts, booking methods, and recommended best practices: Travel Planning and Booking

All airfare must be booked through the Concur online booking tool or directly with an agent at Travel Incorporated . Use of a third-party online travel booking site (e.g. Travelocity, Orbitz) or booking directly with an airline is prohibited. Travel Inc. is the University’s contracted travel agency for individual travel and are able to assist you in addition to the SSEC Travel Office. Dedicated agent hours are M – F from 7am – 8pm CST. Emergency Support is available 24/7.  Call (877) 811-9898 . For complete information on how to book and pay for a flight, and what air travel-related expenses are allowed, see Planning a Trip – Air Travel

When to call Travel Inc. for booking –

  • International Flights
  • When traveling with a companion (non-business-related traveler) to reserve flights for both
  • Trip that includes multiple locations/legs
  • To apply unused credit to a flight
  • For help with cost comparisons

All lodging must be reserved through the Concur online system, directly with an agent at Travel Incorporated , by booking directly with the lodging facility, or by booking through AirBnB. Use of other third-party booking sites (e.g. VRBO, Hotels.com, Travelocity) is prohibited. For complete information on UW lodging policy, see Planning a Trip – Reserving Lodging .

The University has contracts with various lodging suppliers in top travel destinations, including Wisconsin. UW contract rates are only offered within Concur.

Any employee who will operate a vehicle on UW business must be an authorized driver prior to traveling. This includes rental vehicles, fleet vehicles, and personally owned vehicles. No vehicle-related expenses will be paid or reimbursed for unauthorized drivers. For information on using vehicles during UW business travel, see Planning a Trip – Vehicles .

Registration Fees

For information on registration fees, see Planning a Trip – Registration Fees .

The SSEC Travel Office is also available to help you with any of these arrangements. Please provide all applicable information that will help in meeting your needs or preferences.

During Your Trip

How to determine what you can pay for or be reimbursed for while traveling on UW–Madison business: Planning a Trip – Once You’re There

Local Transportation and Tipping

Local transportation while in travel status is payable/reimbursable to the extent it is supported by a business purpose.

Travel by taxi, shuttle, subway, Uber/Lyft/rideshares, bus, train, or any other necessary means of transportation is allowable.

Travelers should choose the most reasonable, cost-effective means of traveling locally. Payment/reimbursement for tips is limited to 20%.

Cancelling/Changing Flights

Costs associated with cancelling or changing a flight are payable/reimbursable provided the reason for the cancel/change is outside of the traveler’s control. Be sure to save documentation to support reimbursement claims.

Cancel flights in Concur or by contacting Travel Incorporated directly.

Receipts/Other Supporting Documentation

Travelers are responsible for retaining their receipts and other supporting documentation in accordance with the UW Reimbursement Requirements .

Reimbursement may be reduced or disallowed if costs are not supported by an itemized receipt and/or other supporting documentation. Example: if a conference’s dates change unexpectedly, save the email correspondence between the conference organizers and the traveler to support the fees for changing the flight.

Getting Reimbursed

For complete information on how to get reimbursed for UW–Madison travel-related and non-travel-related expenses see UW-Madison – Getting Reimbursed . UW–Madison employees are reimbursed for out-of-pocket travel-related expenses in accordance with UW–Madison travel policy (see Expense Reimbursement – UW-3024 ). Employees are responsible for following travel policy, retaining required receipts, and submitting expense reports in a timely fashion.

Links for Deadlines, Receipt Requirements and Documentation

  • Deadline for reimbursements
  • What can be reimbursed
  • Receipt requirements
  • Other supporting documentation
  • Non-travel reimbursements

How to Get Reimbursed

Employees get reimbursed by submitting an expense reimbursement through e-Reimbursement. Once submitted, expense reimbursements are reviewed by at least two levels of approval. Once an expense reimbursement has been fully approved, the reimbursement amount is directly deposited into the employee’s bank account within 5 business days.

E-Reimbursement Process

In order to process your expense report, please submit a completed TER-Travel-Expense-Report and scanned or .pdf versions of all your receipts to [email protected].

For the SSEC Travel Office or administrative students to enter your E-Reimbursement, you will need to delegate entry authority (see Procedure 3024-2-Assign an Alternate ).

  • Sign into Shared Financial System (SFS) .
  • Click the Expenses  tile.
  • Click the Delegate Entry Authority link in the links panel along the lower right-hand side of the page.
  • Click the plus sign to add an additional row.
  • Click the magnifying glass next to the blank field, then click on Advanced Lookup. Enter the alternate’s last name in the Description field. Locate the alternate and click on their name.
  • The Authorization Level should be “Edit.” If an employee chooses “Edit & Submit”, it will revert to “Edit.”
  • Complete this step for Hollyn Gaffner, Sydney Gray, and Treva Robaidek.
  • Click Save .
  • Sign out in the upper right hand corner.

When your expense report has been entered, you will receive an email letting you know the expense report is ready to be reviewed and submitted.

Non-employee E-Reimbursement

Reimbursements must be submitted on behalf of non-employees (see Non-employee E-Reimbursement ).

Tips for Using E-Reimbursement

  • Always be sure to “Log Out” at the end of your session. If you fail to do so, you will need to clear your cache and cookies before you can log in again.
  • Never use your browser’s back button to navigate within E-Reimbursement; instead use the links to navigate within the system.

Additional Resources

Meals and incidentals.

Meals are reimbursed on a per-diem basis, not for actual costs (see Meals Policy UW-3018 ).

Determine which meals and incidentals are approved for reimbursement during business-related travel with the M&IE calculator: Meals and Incidentals

Combining Business and Personal Travel

If personal travel is combined with business travel, an airfare cost comparison is required . The University will not incur additional expense for personal travel. Airfare payments or reimbursement claims submitted without a valid cost comparison will be paid or reimbursed at a flat rate of 80% of the total cost of the fare, no exceptions.

When traveling with a companion (non-business-related traveler), contact  Travel, Inc.  to reserve flights for both the business traveler and companion.

UW System-Combining Personal and Business Travel Webpage

Training and User Guides

  • Traveler User Guides
  • Concur Support & User Guides
  • Will the people I set as E-Reimbursement delegates have access to my personal information?   No, they will only have the ability to create TERs on your behalf.
  • Can I enter TERs for myself instead?   Yes, if you have experience with E-Reimbursement and would prefer to submit your own.  Please contact SSEC Travel with questions .
  • I’ve always handled all of my own travel arrangements, can I still do that?   Yes, but if you choose to handle your own bookings you accept the full responsibility of knowing and complying with the University Travel Policy – UW-3015 .
  • I see the UW policy requires that I turn in my receipts within 90 days after returning from the trip.  What happens if I miss that deadline?   The 90 day rule is necessary to be in compliance with IRS Accountable Plan Rules.  After 90 days the reimbursement is considered taxable income.  For employee reimbursements, if there are extenuating circumstances an Exception Request Form must be completed and approved through the divisional offices.  For non-employee reimbursements payment will need to be made through a Payment to Individual Report (PIR).  These expense reimbursements are reported as taxable income.

Travel/Expense “Tune-In” Training Sessions

  • Video: TBD (Login Required)

Quick Links

SSEC Travel Request Form

Concur Website

UW-Madison – Getting Reimbursed

Travel allowance guide: how to support employee expenses

Feb 27, 2024

Business traveller making a payment using a business travel allowance.

Employers offer their employees a travel allowance for accommodation, transport, and food during a business trip. But there’s more than one way for a company to cover these expenses.

In this article, you’ll discover your options for supporting the expenses your employees incur during business travel.

What are business travel allowances?

When your employees travel for business reasons, the company should provide a travel allowance to cover the costs of their travel expenses, including transport, accommodation, and food.

Each company’s approach to covering an employee’s travel expenses will vary, but these are the most common approaches:

  • Provide a company card to charge everything straight to the company.
  • Issue a daily business travel allowance (per diem) to cover costs.
  • Agree to reimburse all incurred expenses following the trip.

The average company spends around 10% of their annual revenue on travel — so it’s essential to take the right approach when it comes to travel allowances. But that’s not simple when costs fluctuate, and there’s uncertainty around the global economy.

Business traveller using a travel allowance to make a payment during a work trip.

Business travel compensation

Business travel compensation is an alternative name for business travel allowances . Depending on your company’s travel policy, it can be used to cover:

  • Air travel.
  • Accommodation.

Two commonly used approaches for covering business trip allowances include: handing employees a flat travel allowance (per diem) or covering all incurred employee travel expenses . 

Let’s look at each of these in more detail and reveal a third option for ground travel. 👇

Flat travel allowance : pros and cons

Companies that pay a flat travel allowance give employees a fixed amount of money to spend as needed. If an employee spends more than this, they’ll be expected to cover the costs themselves. 

Pros of flat business travel allowances

Giving business travellers a fixed basic travel allowance is a straightforward approach that comes with several advantages:

  • Maintain a consistent spend for every trip.
  • Removes the need for employees to claim expenses.
  • Employees have a clear understanding of how much they can spend.

Cons of using flat business travel allowances

The downsides of a fixed travel allowance far outweigh the advantages:

  • Regular updates are essential to remain in line with inflation and other rising costs.
  • Employees may have to cover some work-related expenses out of their own pocket. 
  • Employers may hand out more than is necessary.
  • Some travellers may have enough money while others have too little. 
  • Some employees may opt for the cheapest possible option in order to save money — and could use unsafe travel or accommodation.
  • Depending on the destination, purpose of the trip, and role of the individual, the amount needed may differ.

An employee outside during an international work trip.

Expense reimbursement: pros and cons

In this case, employers cover all incurred costs during business trips. 

Frequent business travellers may have a company card to use during their trip. But, most employees are expected to use their own money and submit expense reports.

As submitting expense reports uses up valuable working time, it’s worth exploring quicker ways to make a claim. Fortunately, several expense management tools can speed up claiming expenses.  

Pros of reimbursing travel expenses

Expecting your employees to use their own money and claim back the expenses incurred is time-consuming and potentially puts financial pressure on your employees. But there are some possible upsides with this travel allowance approach:

  • Businesses only pay for actual expenses.
  • Give employers more visibility of employee expenses.
  • Gives flexibility to each traveller no matter the destination, length, or purpose of the business trips. 

Cons of reimbursing actual expenses incurred

While there are benefits to reimbursing all employee expenses, there are potentially more drawbacks for employees and employers:

  • Employees need to submit expense reports.
  • Employees are out of pocket until they’re reimbursed.
  • Some incidental expenses may not be strictly related to business purposes.
  • Adds to the workload for Accounting teams as they need to process expense claims.
  • Employers must set up clear travel policies so employees know which expenses they can claim. 

A business traveller using Bolt to cover their local transport costs.

The importance of a transport allowance

A transport allowance is one of the most essential allowances during a work-related trip — after all, you will be on the move. 

As with allowances that cover other expenses, you may be given a company card or a daily allowance (per diem). But these are now both outdated ways of paying for business travel. And this is where Bolt Business will support your corporate travel needs.

With Bolt Business , employers can give employees a company payment method to use when travelling for work with the Bolt app.

When a company creates a Bolt Business account, the employees can set the company as a payment method for work rides in their Bolt app. This allows them to charge rides straight to the company without manually reporting expenses.

Business travel meal allowance

To cover the costs of meals during a trip, employers may provide a business travel meal allowance . It can work in one of three ways:

  • Provide a company card.
  • Give each employee a daily allowance to cover meals.
  • Tell employees to pay using their own month and claim back the expenses later.

The downside to the third option is that it leaves your employees out of pocket until they’ve submitted an expense report, waited for approval, and received reimbursement — which can take several days.

Another option is to use Bolt Food for Business . 

When your company creates a Bolt Business account, you can give certain employees permission to order food and groceries in the Bolt Food app using a company payment method.

A Bolt courier delivering groceries ordered with a meal allowance in the Bolt Food app.

Finding the right approach for travel allowances

Travel allowances are an essential part of any business trip. And the approach you take towards allowances for employees could influence the success of those trips. 

Flat travel allowances (per diem) and expense reimbursement (actual incurred costs) both have their pros and cons., so it is important to consider the specifics of each trip before deciding. 

Additionally, a transport allowance is crucial for any business trip, and Bolt Business is a great solution to address this need. Remember, getting travel allowances right is essential for both employers and employees, and it can make all the difference in the success of a business trip.

Get a transport allowance with Bolt Business

The Bolt app gives you a convenient way to travel in 45+ countries and 500+ cities — and you can use it as a business travel app , too.

With a Bolt Business account , you can give your employees a travel allowance in the Bolt app. These spending limits can be daily, weekly, monthly, quarterly, annually, or for one time only — and travellers can’t exceed the spending limit.

Implementing travel allowances in this way means that you’ll only ever cover each traveller’s actual transport expenses. And by getting dropped off at your destination, there are no unexpected parking fees.

Set your employees up for a successful business trip by giving them a business travel allowance with Bolt Business.

A business traveller travelling in a work taxi paid for using a travel allowance.

Travel allowance FAQs

Get answers to some frequently asked questions about travel allowances.

What is a personal travel allowance?

Employers give a personal travel allowance to employees when they’re travelling for work. The company should support employees with the costs of transport, accommodation, and meals during the trip.

How do I ask for a travel allowance?

Start by reading your company’s travel policy; they may already offer a travel allowance. If not, provide a detailed breakdown of the expected costs during your trip and explain why the trip benefits the company. 

Following your trip, follow up with your employer and provide proof of all purchases for which you wish to claim expenses. 

How do you use a travel allowance?

Some companies will provide you with a company card, allowing you to charge expenses straight to your employer. Other companies will expect you to submit expense reports to claim your outgoings. Remember to hold onto your proof of purchase if this is the case. 

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IMAGES

  1. Travel Reimbursement Policy

    about travel expenses reimbursement

  2. FREE 7+ Sample Travel Reimbursement Forms in MS Word

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  3. Travel Expense Reimbursement form in Word and Pdf formats

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  4. A Guide to Travel Expense Reimbursement Process

    about travel expenses reimbursement

  5. A Guide to Travel Expense Reimbursement Process

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  6. FREE 7+ Sample Travel Reimbursement Forms in MS Word

    about travel expenses reimbursement

COMMENTS

  1. Publication 463 (2023), Travel, Gift, and Car Expenses

    Travel expenses defined. For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. ... You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. If you use this method, you must ...

  2. PDF Guide to Employee Travel Expense Reimbursement

    Choosing the wrong travel expense reimbursement policy can increase overhead costs, damage work force morale and create legal disputes over the base wage used to calculate employee overtime rates. It is important for employers to understand the basic rules and options of travel expense reimbursement so they can choose the most efficient plan ...

  3. Topic no. 511, Business travel expenses

    Topic no. 511, Business travel expenses. Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes. You're traveling away from home if your duties require you to be away from the general ...

  4. The ABCs of Travel Expense Reimbursement: A Beginner's Handbook

    Travel Expense Reimbursement is a process where an employer reimburses an employee for expenses incurred during a business trip. These expenses can include transportation, accommodation, meals, and miscellaneous costs. Employees need to understand what is eligible for reimbursement and how to track and document these expenses properly.

  5. Travel Expense Policy

    A staff travel reimbursement form is required for reimbursement of all vehicle-related expenses, including gasoline, wear and tear, and personal auto insurance. As of [date], the rate is [$] per mile.

  6. Understanding business travel deductions

    Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep to meet the demands of their work while away. Travel expenses must be ordinary and ...

  7. A Guide to Travel Expense Reimbursement Process

    Travel expense reimbursement is when an employer/organization compensates their employees for all the travel expenses incurred during a business trip. This includes accommodation, flights, meals, ground transportation, and other business travel-related costs. The travel and expense reimbursement process generally involves employees collecting ...

  8. Travel Expenses Definition and Tax Deductible Categories

    Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed travel ...

  9. Complete Guide to Reimbursing Employees for Travel Expenses

    Excess Reimbursement. If an employee receives a travel advance to cover travel expenses but spends less than the advance, the difference is an excess reimbursement and must be returned to the employer to not be taxable. If the excess isn't returned in a reasonable amount of time, it's taxable. A reasonable period of time in this instance is ...

  10. What to Know About Travel Expense Reimbursement + Templates

    2. GeneralBlue simple free travel expense reimbursement form. This free travel expense reimbursement form by GeneralBlue is as easy as it gets. It's an Excel template with 8 columns for recording the expenses incurred traveling for business. With this straightforward form, you can record: The date you traveled.

  11. Travel resources

    Plan and book. Research and prepare for government travel. Per Diem, Meals & Incidental Expenses (M&IE) Passenger Transportation (Airfare rates, POV rates, etc.) Lodging. Conferences/Meetings. Travel Charge Card. State Tax Exemption.

  12. A Guide to Travel Expense Reimbursement Process

    Travel expense reimbursement is the process of paying your employees back for the out-of-pocket expenses incurred during a business trip. The firm must reimburse the employee fully if the employee, during the business trip, had paid from his wallet for expenses such as travel, food, etc. Organizations globally verify the legitimacy of the ...

  13. Travel reimbursement policies: What You Need to Know

    As of January 1, 2013, the standard mileage rate is 56.5 cents per mile. If the employer's reimbursement rate exceeds the standard rate, the excess amount is taxable to the employee as regular wages. When there is an excess reimbursement, the nontaxable and taxable amounts are reported on form W-2 with:

  14. Travel Expense Reimbursement: Importance, Process and Platform

    What is travel expense reimbursement? The process of compensating your staff for out-of-pocket costs incurred during a business trip is known as travel expense reimbursement. If the employee used his wallet to pay for expenses like travel, food, etc. while on the job, the company is required to fully reimburse the employee.

  15. VA Travel Pay Reimbursement

    File a claim for general health care travel reimbursement online. General health care travel reimbursement covers these expenses for eligible Veterans and caregivers: Regular transportation, such as by car, plane, train, bus, taxi, or light rail. Approved meals and lodging expenses. You can file a claim online through the Beneficiary Travel ...

  16. How to Deduct Business Travel Expenses: Do's, Don'ts, Examples

    To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn't your home. 2. You should be working regular hours. In general, that means eight hours a day of work-related activity. It's fine to take personal time in the evenings, and you can still take weekends off.

  17. Travel Expenses

    Travel expenses include food, transport, accommodation, commute, and expenses for other services. The employee is responsible for maintaining receipts and other documents that reveal a particular expense they claim. After examination, the employer will reimburse the employee. Hence, they should be vigilant while requesting reimbursement for ...

  18. Detailed Guide on Travel Expense Reimbursement

    1. Transportation expenses. The first and essential travel expense, transportation cost, has to be reimbursed. All kinds of transport used on the business trip are supposed to be in the reimbursement claim. These include train or flight tickets, public transport in the city, car rental costs, or ride shares.

  19. Reimbursement for Travel Expenses

    Expense Reimbursement Submission Timeliness. Travelers should submit all expenses for reimbursement and reconciliation within 10 days of the completion of the event or trip but no later than 45 calendar days. Expenses submitted more than 60 calendar days after completion of the trip or event, if reimbursed, may be considered taxable income.

  20. PDF 2024 Funded Consumer Rep Guidelines for Reimbursement of NAIC Travel

    Receipts are required for expense itemsof $50 or more Receipts for a. irline tickets, hotel . rooms, or other expenses the NAIC must be attached to the expense paid directly by reimbursement f orm. The expense report shall include an explanation of any extraordinary items. Entertainment

  21. Expense Report

    Electronic expense report system for reimbursement of travel, entertainment and miscellaneous out-of-pocket expenses. Concur Expense is now live across campus for all Faculty, Staff and Students. This new system was implemented to streamline the travel booking and expense reimbursement processes for faculty, staff, and students who are ...

  22. SSEC Travel & Expense Reimbursement

    If personal travel is combined with business travel, an airfare cost comparison is required.The University will not incur additional expense for personal travel. Airfare payments or reimbursement claims submitted without a valid cost comparison will be paid or reimbursed at a flat rate of 80% of the total cost of the fare, no exceptions.. When traveling with a companion (non-business-related ...

  23. S.3834

    Summary of S.3834 - 118th Congress (2023-2024): A bill to direct the Secretary of Veterans Affairs to ensure veterans may obtain a physical copy of a form for reimbursement of certain travel expenses by mail or at medical facilities of the Department of Veterans Affairs, and for other purposes.

  24. Travel allowance guide: how to support employee expenses

    Flat travel allowances (per diem) and expense reimbursement (actual incurred costs) both have their pros and cons., so it is important to consider the specifics of each trip before deciding. Additionally, a transport allowance is crucial for any business trip, and Bolt Business is a great solution to address this need.

  25. Division of Administration: Travel and Expenses

    CUNYfirst Travel and Expenses. CUNY/State Employees - Travel Guidelines and Resources. When using tax-levy funds, all requests for travel approval and expense reimbursement must be processed via the CUNYfirst Travel and Expense Module. Utilizing this self-service application will expedite the process for approving travel requests and receiving reimbursement for travel expenses; thus ...

  26. Is flight insurance worth it?

    However, some flight insurance travel policies, like Allianz travel insurance plans offered through Delta, include coverage for medical and other nonrefundable expenses. Hence, it pays to read the ...

  27. Federal Register :: Agency Information Collection Activity: Veteran

    Abstract: Pursuant to 38 U.S.C. 111 and 38 CFR part 70, subpart A, the Veterans Health Administration (VHA) Beneficiary Travel (BT) Program, provides payments for authorized travel expenses to help Veterans and other beneficiaries obtain care or services from VHA. VHA requires certain information be gathered to determine whether BT eligibility ...

  28. Travel Insurance Costs Rise: February 26, 2024

    Here's what you can expect to pay for travel insurance when visiting the top 10 most popular destinations. Travelers booking trips last week (February 18 through February 24) were focused mainly ...

  29. PDF 8SGDWHG 0DUFK

    Title: Microsoft Word - Attach-Travel-Living-Expense-Guidelines-20240301.docx Author: Lee, Alice Created Date: 2/29/2024 1:15:31 PM