Corporate per diem travel policy
Now you know all there is to know about per diem allowances; it’s time to share that knowledge with your employees. A corporate travel policy that includes information on per diem payments is key to keeping your employees in the loop and in line with travel budgets.Keeping all your travel information in one place takes the hassle out of business travel and lets your employees know they’re covered when traveling on business. It’s a one-stop-shop for all your employees’ business travel questions, from allowances to per diem reimbursement.First, let’s quickly recap the key aspects of per diem allowances.Per diem allowances for traveling employees: a recap
Per diem payments are daily allowances given to traveling employees to cover costs associated with business travel and trips. The allowances and methods of determining per diem allowances vary in different countries, and alternative arrangements can be arranged in some cases.In the UK, rates are decided by HMRC. They cover meal expenses and incidental expenses (M&IE). Lodging expenses for overnight stays must be arranged with HMRC via a bespoke rate application. In order to do this, businesses must provide previous business expenditure proof.In the continental United States (CONUS), which excludes Alaska and Hawaii, rates are decided by the U.S. General Services Administration (GSA).They separate rates into lodging rates and M&IE rates and provide figures for both. Unlike in the UK, the Internal Revenue Service (IRS) requires expense reports for employee travel.There are two methods to determine per diem allowances in the U.S.:- Standard per diem rates: individual per diem rates for different locations.
- High-low substantiation method: ‘high-cost’ locations take one rate; all other locations adopt the ‘low-cost’ rate.
The main benefit of per diem allowances is they aren't considered to be taxable income. They’re also beneficial as they offer flexibility to the employee in how they spend travel allowances. Per diem payments are also less hassle than reimbursing actual expenses, as the latter requires expense reports and receipts for proof of per diem expenses.The potential downsides to per diem payments are that they can push employees to cut corners to pocket any excess. The same trust offered as a benefit can ultimately be abused.Find out your per diem allowance for your upcoming trip
Our per diem calculator works out exactly how much you’re entitled to spend when you travel for work.2. Roles and responsibilities
This section outlines the key points of contact when it comes to travel risk management. It should inform all parties of their roles within the process and remind everyone of their responsibilities while away on travel.3. Travel status and approval
This section details the proposed travel to obtain approval before travel. This should list potential risks faced by the traveling employee and how to minimize those risks beforehand.These include location-based risks, such as the standard risk associated with traveling somewhere, and individual-based risks, depending on the individual traveling.?)
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