fcm-hw-business-travel-expense-policy-guide

Business travel expense policy guide & template

 

Let’s face it, business travel can get expensive, especially if you have travellers on the road submitting claims left, right, and centre for things you didn’t agree to. Enter a travel expense policy. A policy can help overcome many challenges by setting clear reimbursement expectations and dictating how your employees can spend company funds while travelling. 

An all-inclusive policy can also create a level-playing field. Under one policy, all employees are subject to the same rules and expense reimbursement rates, empowering them to make good choices and not feel hard done by. 

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What are business travel expenses? 

Put simply, business travel expenses refer to costs incurred by employees while on a business trip. In Australia, the Australian Taxation Office (ATO) does a lot of the heavy lifting and outlines what deductible travel related expenses generally include. These business expenses can include: 

  • Transport: Airfares, taxi or rideshare fares, public transport, car rentals, fuel, tolls, and parking fees. 

  • Accommodation: Hotels, Airbnb rentals, serviced apartments, or any other form of paid overnight accommodation. 

  • Meals and entertainment: Reasonable food and drink costs, given the location and occasion. 

  • Incidentals: This could involve internet access and fees for conferences or training directly related to the work trip. 

What to include in a travel expense policy 

A solid travel expense policy outlines clear guidelines on what can and can’t be claimed, along with how and when claims can be submitted. While the ATO provide some guidance on daily rates for accommodation, meals, and drinks, it’s wise to consider where your travellers are headed. Different expenses or higher rate caps might be necessary in rural locations or international countries. 

Eligible expenses  

  • Flights: Specify acceptable travel classes (economy, premium, business, or first), fare types (base, choice, flexible etc), and locations (domestic or international flights). 

  • Ground transport: Outline car hire cover levels (small, medium, intermediate) and kilometre reimbursement guidelines available for personal car use. 

  • Rideshare and taxis: If your company uses Cabcharge, include the approval process and accessing a Cabcharge. Otherwise, specify if ridesharing is permitted and if car claims are allowed for commuting to and from work. 

  • Accommodation: Set limits on nightly rates and preferred hotel brands or hotel locations. Offer guidance around when or if Airbnb and self-contained apartments are acceptable. 

  • Meals: Detail claimable amounts for each meal or an overall daily cap. Specify which meals are covered (breakfast, lunch, dinner, snacks, drinks) and any caps on alcohol if applicable. 

Non-eligible expenses 

  • Personal: If your company embraces bleisure, remind employees that once work is done, personal expenses related to personal entertainment and activities are off the table. 

  • Upgrades: Upgrades to flights and hotels are generally a no-go unless pre-approved or complimentary as part of a rewards membership. 

  • Non-business activities: Shopping, leisure experiences, or dining at that super-fancy restaurant? Not claimable (unless your company is super generous).  

  • Travel companion: For companies that allow plus-ones, expenses for these extra travel buddies won’t be covered. 

  • Alcohol: Depending on the company policy, alcohol might be restricted. A glass of wine with dinner? Maybe! But buying a six-pack for the hotel room? Probably not for a business trip. 

  • Fines: Traffic or parking fines, vehicle repairs, toll infringements etc, are all back on the traveller. 

Grey area expenses 

These are some expenses that tip toe the line of claimable and not, depending on company policy. So, it’s best to clarify small expenses like the ones below. A good way to decide is to ask yourself: Is this expense necessary for business travel? 

  • Ancillaries: Outline what ancillary items are included. Some companies will allow seat selection, baggage, and mini-bar consumption fees, while others might not permit inflight meals and entertainment or lounge access.

Booking guidelines 

Incorporate some guidelines around booking the travel. This is different per company but could look like the below: 

  • Contact the Travel Manager for assistance in booking travel arrangements. 

  • Seek prior approval from leader and book directly through any online booking source using the company credit card.  

  • For group travel, coordinate with the Travel Manager or designated team leader to secure better rates. 

Approvals 

Detail how or if employees can seek pre-approval for certain expenses and travel. This may involve submitting a request to their leader prior to travelling or getting a pre-paid travel allowance dropped into their pay. 

Approvals should also communicate expense approval lines, indicating who the claim goes to and who can approve or decline it. 

Document and record

Remind employees to retain receipts when on the road. They’re essential for audits, taxes, and proof of expenses. Define how receipts should be submitted (digital or hard copies) and any maximum claim possible without a receipt. Your company might also have rules around the maximum claim possible without a receipt and if a statutory declaration is needed in the event a receipt is not available. 

Claiming and reimbursement 

Communicate the process of how an employee can claim their expenses and the reimbursement process. This could be a manual process via email or an automated expense claims tool. Encourage timely submissions, ideally within a week of completing travel, to avoid reimbursements and budget control delays. 

Employees will also want to know how and when they get their money back or company credit cards cleared. Indicate some rough timelines around how long it will take for their money to come back into their account and how this is processed (during pay cycles, stand-alone pay runs, etc.). 

The role of employers 

Employers have a role to play in actively supporting business travellers to understand and follow the travel and expense policy: 

  • Training and communication: Provide regular training sessions to explain the policy, addressing any questions employees may have. Use multiple formats (webinars, written guides) to accommodate different learning styles and have them easily accessible to all. 

  • Regular reviews: Periodically review and update the policy to align with changing ATO guidelines, company needs, and expense reports. 

  • Support and resources: Offer assistance for employees with questions about the policy. Provide handy tools like online booking tools, expense claim software, and digital receipt management to make life easier. 

 

Quick recap 

  • Establish clear guidelines for reimbursable and non-reimbursable expenses. 

  • Use expense management software to track and manage business travel expenses. 

  • Provide business travellers with resources and support to help them navigate the policy. 

  • Regularly review and update the policy to ensure it remains relevant and effective. 

 

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