Corporate trips are a part of many employees' lives. You need to go to a meeting, sign documents, check the object, etc. There can be many tasks from work. It would be strange not to cover the employee's expenses during a business trip. He can't spend his own money to meet the company’s needs.
That is why there are business travel allowances to cover the expenses incurred by the employee on the trip.
For an employee, this means only signing one paper and saving checks. And for the company, this is a real challenge. What should the allowance cover to cover travel expenses? What is the maximum amount of money to provide employees? How to agree on covering expenses?
We will talk about all this in this article.
Let's explain travel allowance meaning with a simple example. The employee is going on a business trip. During the trip, he spends his money on transport, accommodation, and food. But why should he spend his salary? After all, he went on behalf of the chief. It turns out that a business trip brings him only extra expenses and takes part of his salary.
It means that it is the company that must cover these costs. If companies didn't do this, all employees would refuse to travel.
Is it necessary to reimburse expenses for a business trip? In some countries, yes, companies must provide money to an employee on the train.
Usually, expenses on a business trip aren’t subject to taxation. This means that it is profitable for the company to reimburse the employee for the costs.
Of course, the refund terms vary from one company to another. For example, some companies don’t pay for food, and someone gives money for 3 meals a day in restaurants.
However, there is still something in common with travel allowances. What is covered by the company in basic travel allowance?
— transportation costs (plane tickets, baggage fees, taxi to the hotel and a business meeting, car rental, toll roads, parking);
— food. We have already written that this item varies in different companies. But if you come on a business trip with an overnight stay, you are usually offered to pay for breakfast and dinner;
— entertainment, if it is necessary to communicate with the company's customers; — insurance for the employee;
— medical expenses, for example, for a Covid test or vaccination for other countries.
In unusual situations: some companies also reimburse tips. This is especially common in the USA, where tips are included in the bill. Also, if the business trip turns out to be long, the company can reimburse the costs of laundry and dry cleaning.
We have already talked about the specifics of employees' travel expenses in companies and the most frequent refunds. However, there are general rules that apply to all companies.