Business trips are an effective tool for business development and support. In addition, any business trip requires quite significant expenses, and since the employee is sent to another city to perform company tasks, it is she who must cover the costs. Today we’ll talk about what to consider in your travel budget and how you can optimize costs.
What to include in your budget
The composition of travel expenses is approved in the Labor Code, the list includes:
- average salary of an employee – paid while on a business trip;
- daily allowance – to compensate for possible costs associated with travel and work outside the home, the company must pay employees per diem;
- reimbursable expenses – if during the trip an employee paid for travel and accommodation from his own money, and he has supporting documents, the company must reimburse these expenses;
- additional reimbursements – companies have the opportunity, at will, to reimburse employees for other types of expenses, such as payment for mobile communications in roaming.
How to optimize your travel budget
We’ve written a lot on our blog about each type of expense listed. For example, here. Therefore, in this material we will list only the main points.
When paying daily allowance, you need to remember the limits on amounts that are not subject to personal income tax. In 2020
year, such limits are 700 rubles per day for Russia and 2,500 for foreign trips. The company can pay more, but if these limits are exceeded, it will have to pay taxes and contributions to funds.
As for average earnings, the formula for calculating it looks like this:
Average daily earnings = all eligible payments for the pay period/number of days worked for the pay period
For calculations, you need to take a period of twelve months before the month of the start of the business trip.
According to current norms, travel expenses must be paid to the employee in the form of an advance before the start of the trip. Upon returning to the office, the employee himself is obliged to provide documents confirming expenses – receipts from hotels, gas stations, tickets, etc.
If the actual costs of the trip turned out to be lower than expected, then the employee must return the remaining funds. Otherwise, when the funds issued in the form of an advance were not enough, the company must compensate the difference. To minimize the likelihood of such situations occurring, the Business Travel Regulations should include restrictions on the price of tickets and the cost of accommodation during trips. That is, tickets must be economy class, hotel rooms must be standard, not luxury, etc.
Average earnings during a trip are paid in the same way as a “regular” salary – on the same dates.
Conclusion
Creating a budget for business trips is not difficult – there are not many main expense items, and current standards allow a flexible approach to their design. However, it is important to remember some subtle points – for example, including compensation for expenses in the advance payment before the trip, taking into account the limits on tax-free amounts for daily allowances and setting the limits of expenses on a business trip.
