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Everything you need to know about business travel allowance

What is a business travel allowance?

A business travel allowance is a budget allocated for a business trip that covers necessary expenses during the trip, like flight tickets, hotel rooms, meals, public transport tickets, etc.

In some countries, it is stipulated by law that companies must provide employees with a budget for business trips.

In most countries, business travel is not taxable, which means there are no additional expenses for companies that want to reimburse their employees.

General guidelines for employees 

As an employee, keep in mind that not every company has the same rules and procedures. Therefore, you need to be informed of your company's travel policy. The basic travel allowance should cover the following: 

  • Transportation - flights and any kind of public transportation used during the trip 
  • Accommodation - hotel rooms or similar if there is a necessity for an overnight stay
  • Meals - food and drinks, 2 to 3 meals a day
  • Travel insurance - in case something gets stolen, or an accident happens
  • Medical expenses - like vaccinations necessary for some countries
  • Additional costs - like tips for the staff or laundry cleaning in case of a longer stay — but this is optional

One more thing to remember is that if you are expecting a proper reimbursement from your company, it is very important to save all of the receipts as proof. And, of course, be realistic: don't expect your employer to pay for private expenses.

General guidelines for companies

As a business owner, you must establish specific rules and be clear about them in your company's travel policy. 

  • It is not obligatory to cover employees' travel costs from home to the airport, considering that it is in the same city
  • Expensive hotels are not necessary. Regular hotel rooms are just fine — after all, your employees are on a trip for business, not pleasure
  • Meals: this also varies from company to company. Usually, it covers two meals a day, while some companies go for three. Drinks also fall into this category. However, you do not have to pay for every drink. Determine the standard quantity per person, and that is what should be covered. 
  • Consider entertainment allowance because there is a possibility that the employee has to go to a business dinner with a client and then to a bar or someplace else.

Corporate travel policy

Why is travel policy important in terms of allowance? Simply put, if you have a prescribed modus operandi, it’s easier to establish the budget necessary to cover everything. 

Of course, sketching a travel policy can be quite an undertaking, so here are a few tips to help you manage. 

Map the itinerary

One of the most important things to consider is how you want your company's business trips to look, whether it is strictly business or if there is room for some relaxation. It is important to set clear rules and instruct employees about your company's rules to avoid misunderstanding.

Create a contact list

Another important part of compiling the travel policy should be the instructions on who to contact in case of an emergency. A contact list of immense importance, but unfortunately, many realize just how important it is only when something unexpected happens.

Standardize your expenses

It would be best to determine the maximum amount you are willing to set aside for business trips per employee per day. Still, in this case, you have to be aware of the prices in the city/country your employees are traveling to.

In this way, you will avoid unnecessary costs and prevent employees from spending the company's money in expensive places.

Consider reimbursement 

In cases where it is difficult to determine the travel allowance in advance, companies reimburse their employees after the trip. If you choose this method, the employees must keep receipts and deliver them after their trip to the finance department as evidence. The finance department then estimates whether their expenses are compliant with the policy. 

Generally, creating thorough guidelines promotes effectiveness and saves time and money.

How can Travelspot help?

We arrange everything necessary for a business trip, from flights, accommodation, public transport, and car rentals, even conference rooms for meetings. 

Use our app to create a custom travel policy tailored to your needs, and allow your employees to travel carefree and focus on business. Remember, we are available 24/7, and we are here if you need us.

Finally, you have an assistant!

What do you think? 

If you have any questions or additional eagerness for knowledge about how our travel management platform can help your small business in traveling organization, feel free to contact us

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