Travel Pay | Rules For Determining Travel Pay (2024)

Rules For Determining Travel Pay

What is Travel Pay, and how does it work? Federal regulations establish the baseline rules for travel time pay. State regulations generally follow the federal rules, but in a few cases have stricter requirements.

While travel pay laws vary by state, generally speaking, normal home to work and work to home travel at the beginning of the day and at the end of the work day is not compensable.

However, travel between work sites or an assigned workplace is usually compensable, and usually an employee must be compensated for travel time on their regular days off if it cuts across their regular work hours.

Employer Questions About Travel Pay

Q: What Is Travel Pay?
A: Travel Pay is payment for expenses employees spend traveling for work-related activities. This could include airfare, trainfare, gas and milegae, and meals. Note, however, that time spent in home-to-work travel by an employee generally is not "hours worked" and, therefore, does not qualify as travel pay.

Q: Is Travel Pay Required?
A: Employers are required to pay the reasonable business expenses, including travel, lodging, and meals, for work-related expenses.

Q: Which Travel Expenses Are Reimbursable?
A: The cost of work-related travel, including transportation, lodging, meals, and entertainment that meet the criteria outlined in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses are generally reimbursable expenses. Expenses considered under travel pay typically include airfare, car rental, lodging, parking, train or taxi fares, and the typical meals and mileage.

Q: Is Traveling Between Home And Work A Travel Expense?
A: You don't have to pay employees for travel that is incidental to the employee's duties and time spent commuting.

Q: What Is The Standard Meal Allowance?
A: The standard meal allowance is the federal M&IE rate. For more specific rates, see http://www.gsa.gov/perdiem

Q: What Is A "Per Diem" Allowance
A: A "per diem allowance" is a flat rate, stated schedule, or other IRS-specified rate or schedule payment made under an accountable plan for lodging, meals, and incidental expenses for business travel away from home. The government per diem rates for meals and lodging in the continental United States are listed in Pub. 1542, Per Diem Rates.

Q: Are There Requirements For How Quickly Reimbursem*nts Should Be Made?
A: Employers are required to issue reimbursem*nt checks to those employees in a "timely fashion." Though this is not defined, within 30 days after the employee submits their reimbursem*nt request is typical for reimbursem*nt.

Q: Are Reimbursem*nt Payments Taxable To Employees?
A: Reimbursem*nts made at the standard Internal Revenue Service rate are not considered income, so they are not subject to tax.

Q: Can An Employer Refuse To Reimburse Expenses?
A: If the employee does not provide accurate records, the employer can refuse to reimburse the expenses.

Recommended Training For Handling Travel Pay

Don't get caught - and penalized - for not following travel pay laws for the states in which you do business. Click the applicable link below to order our training course on Travel Pay.

Featured Course: Questions & Answers For Handling Travel Pay

This audio conference covers the IRS rules regarding what is considered travel versus commute and what is an allowable expense versus taxable wages. It will enable you to understand how and when to compensate an employee for travel time away from a work site.

It will analyze which employees are entitled to travel time pay and at what rate, and show how critical it is to communicate the rate of pay, the requirements of travel and the travel tracking necessary to compensate the employee properly. It also discusses typical problems that arise with travel and other FLSA issues such as meals during travel.

Learning Objectives:

• What is considered bona fide travel by the IRS: the rules for mileage, car rental, airfare, hotel, personal aircraft are all addressed
  
• What are the accountable plan rules as they pertain to travel expenses? How quickly must receipts be provided by an employee? How often do expense reports needs to be submitted?
  
• What is considered a wage or a taxable commute benefit?
  
• The IRS guidelines regarding commute costs
  
• "Breaks in service" allowing travel expenses to avoid reclassification as wages?
  
• The concepts of "co-locating" and "tax turtles" also will be addressed

More Details / Order:

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