How does mileage allowance work in Romania?
Unlike some European countries, Romania doesn't have a single, flat rate set by the Romanian Government for mileage allowances. This can feel a bit more flexible but also requires some planning on your part as an employer. Here's a breakdown of how it typically works:Who Decides the Rate?The reimbursement rate per kilometre is usually negotiated between the employer and the employee. This means you, as an employer, can tailor the rate to be competitive when outsourcing work. You can establish a clear company policy for outsourced employees or negotiate rates within an individual employment contract.What's Covered?The mileage allowance typically aims to compensate employees for the costs associated with business travel and can include:- Fuel costs: are the main expense, reflecting the gasoline or diesel used over the number of kilometres for work trips
- Vehicle wear and tear: is the increased depreciation on the car due to business use
Additional Considerations:Some companies might offer a more comprehensive package, covering a portion of the following:- Maintenance and repairs: costs related to keeping the car running smoothly for business travel
- Vehicle taxes and insurance contribution: a small part of the annual fees and insurance premiums may be factored in
- Tyre wear: the allowance might consider the extra wear and tear on tyres due to business miles
What about tax implications? As long as the mileage allowance is reasonable, documented properly and adheres to Romanian tax regulations, it's generally tax-free for the employee—not subject to social security contributions or income tax. This can be another advantage when considering the overall compensation package for outsourcing workers in Romania.
Tax treatment guidelines for car and car-related benefits
What is not included in the mileage allowance in Romania?
When using private cars for business trips in Romania, certain travel allowances and expenses are not included in the mileage allowance. Here's a detailed overview:- Travel expenses: these expenses cover the costs of various modes of transportation used during business travel, such as flights, taxis and public transport and are reimbursed separately from mileage allowances
- Incidental expenses: these are additional costs that may arise during business travel, such as communication fees, parking charges and tolls and are reimbursed separately from the mileage allowance
- Daily allowance: employees on business trips within Romania are entitled to a daily meal allowance of RON 57.50. This allowance covers meals and other minor expenses without needing additional receipts. However, it's important to note:
- Calendar year limit: the 60-calendar days limit for business trips with daily allowance applies per calendar year (January 1st to December 31st).
- Tax Implications: if the total daily expenses on a business trip exceed the RON 57.50 (€12) allowance**, the exceeding amount becomes subject to income tax and social contributions.
**(Source 1, Source 2)
What is not included in the commuting allowance in Romania?
These include expenses or costs that the employee should pay from their own pockets. These include:- Companion expenses: expenses incurred for travel and stay arrangements for family members, spouses, or friends accompanying the employee on a business trip
- Personal travel: the allowance is for work commutes, not personal trips
- Non-business purchases: any non-business-related purchases made by the employee during a business trip, such as buying gifts or souvenirs
- Leisure activities: costs associated with leisure activities or entertainment during the commute, such as visiting a gym or a cinema
How can I file a mileage allowance claim in Romania?
To file a mileage allowance claim in Romania, employees must follow their company's specific reimbursement procedures, as there is no standardised national mileage rate. First, maintain a detailed mileage log for each business trip, recording the start and end odometer readings, dates, and trip purpose. Collect and submit all relevant fuel receipts to support your claim. Make sure you adhere to your company's internal policies for submitting expense reports, which typically involve completing a mileage reimbursement form and attaching the necessary documentation. Submit this to the designated department, usually finance or human resources. Always consult your employer's guidelines for any additional requirements or specific processes.
Simplify business travel management in Romania and beyond with TravelPerk
Planning a business trip to Romania can be a logistical headache—booking flights, hotels, and meeting spaces is time-consuming in your own country, let alone one that’s foreign to you! TravelPerk offers an easy solution with a dedicated travel management platform. TravelPerk simplifies the booking process for flights, hotels and car rentals so your employees have access to the most up-to-date travel options, at a rate that matches your budget. Plus, TravelPerk integrates with expense management tools like Pleo and Expensify. This integration allows employees to easily track and submit mileage claims, ensuring accurate expense reporting and reducing administrative burdens for every type of business.Frequently asked questions about mileage allowance in Romania
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