A travel expense policy sets clear expectations for business travellers. Use our adaptable travel expense policy template to create your own
A travel expense policy sets reimbursement expectations, ensuring a company and its employees are on the same page, which is why a travel expense policy template is so crucial. Plus, a clear policy helps with a broad range of travel-related processes, from decision-making to travel management to keeping on budget.
In this guide, we’ll cover the definition and main features of a travel expense policy. We’ll also provide an expenditure policy template and examples for inspiration when creating a workable policy of your own.
In most locales, it’s not a legal requirement for employers to cover travel expenses employees, but it’s a widely accepted business practice.
Specific requirements vary from one country to the next. For example, US federal law requires that companies pay for all time spent working, including travel time. However, this requirement doesn’t extend to travel expense reimbursement, which is up to the discretion of the employer.
In the UK, there’s also no legal requirement to reimburse travel expenses, but employees and employers can claim these expenses for tax relief, incentivising reimbursement.
Before diving into the finer details of a travel and expense policy, it’s important to understand what counts as travel expenses.
These include any necessary expenses racked up during business travel, including meals, overnight accommodation, plane and rail tickets, public transportation, parking fees, mileage, and road tolls. Employees can also be reimbursed for money spent entertaining clients, partners, and prospective customers during a business trip.
On the other hand, everyday costs like your weekday commute wouldn’t count as a travel expense. Most companies won’t pay for personal entertainment and clothing, either, even if it was specifically purchased for business travel.
A travel expense policy is a written document, usually created by the business’s finance manager, outlining rules for business travel. It clearly lists travel expenses, defining which are reimbursable and to what limit. The policy will also state which expenses the employee will be expected to pay out of pocket.
Most travel and expense policies detail how employees should book and expense their travel, while explaining how the company’s payment procedures work. For example, the document might outline whether employees can fly first or business class.
Here are a few additional details you might see on a travel expense policy template:
With business travel, it’s important to set expectations. Employees are given guidelines for booking travel within limits, knowing exactly what they will, and will not, be reimbursed for.
At the same time, you’ll be able to keep your employee travel within budget, reducing spend while retaining control. A clear policy reduces the chances of misunderstandings, and their resulting frustrations, over expense reimbursement. This creates a fair, hassle-free travel booking and management process.
Your company’s travel and expense policy can be as simple or complex as you wish. At its most basic, this document should include the following sections:
Travel expense policies start with an introduction outlining the purpose of the document and instructions for how and when to use it, as well as approval levels and contact persons for the policy.
One of the most important components of any expense policy, this lists all the expenses that employees can be reimbursed for. You can break this section up by common travel-related costs, including airfare, accommodation, transportation, meals, and communications, i.e., mobile phone or Wi-Fi charges.
Along with allowable expenses, your policy should include a bulleted list of expenses that won’t be reimbursed by the company. This helps travellers and travel bookers to budget for their journey more effectively.
The next section should include everything the traveller needs to know about how to book business trips. Some companies will handle travel arrangements internally, while others will let employees manage their own travel with an approved platform, such as Booking.com for Business.
Outline processes that the employee needs to follow to receive their reimbursements, including actions needed before, during, and after their travel.
You can also include a section for travel support, insurance, and safety issues, such as duty of care. This lets travellers know who to contact if they need any support during their journey.
When the time comes to write a travel expense policy, you can refer to existing expense policy examples, a wide variety of which are available online, and create your own document.
Start your policy document with a detailed introduction. This can include any identifying details about your company, along with its culture, standards, and reasons for creating this document. Give a brief overview of the types of qualifying and non-qualifying expenses for reimbursement, so that the reader can understand expenditure at a glance.
If not everyone in your organisation is eligible for business travel reimbursement, make this clear after the introduction. Describe which departments, teams, or groups qualify for reimbursement, such as employees attending conferences and trade shows.
In this section, you should create an itemised list of all qualifying expenses for company reimbursement. Examples of categories include transport, meals, and lodging.
Immediately after the reimbursable expenses, make it clear which expenses your company will not pay for. It’s helpful to provide any reasoning behind these decisions in the document, to make your company’s position crystal clear.
Examples of non-reimbursable items typically include things like:
The details of this section will depend on how your company prefers to book travel. Some businesses will leave booking to an office manager, while others will use a platform enabling employees to log in and book their own travel. In either case, describe the approved booking method or tool, as well as preferred vendors.
This section should also outline maximum nightly rates for accommodation, per diem rates for meals and expenses, rules for flying economy or business class, and permitted rental car class.
Another factor to consider in this section is whether your company permits employees to bring travel companions with them. Ask yourself:
Along with booking travel, it’s important that your employees understand how to report reimbursable expenses. You might use an automated tool or require paper receipts, but no matter which method you choose, outline how to use your tool of choice. This section should share where to send expense reports, along with all contact information and deadlines.
Close out your document with safety-related information to help your travellers feel supported on the road. List contact details for travel support providers, so that employees know who to message in case of cancellations, changes, and emergencies.
You’ll find a variety of travel policy examples online. Here’s a basic expenses policy template you could use as inspiration and adapt to your company’s needs.
[Business Name] Travel Expense Policy Overview
This travel expense policy outlines how employees of [Business Name] will be reimbursed for work-related expenditures. Some expenses made during company business may not be eligible for reimbursement, as listed in this expense policy.
Reimbursement Eligibility
This policy applies to all [Business Name] employees, both part-time and full-time, that need to travel for work-related purposes.
Qualifying Travel Expenses
[Business Name] will reimburse eligible employees for the following expenses:
[List all qualifying expenses, including per diem rates and limits, here]
This list is not exhaustive. Please query any non-listed expenses with [HR/Finance Manager] before submitting a claim.
Non-qualifying Expenses
[Business Name] will not pay for the following expenses:
[List all non-qualifying expenses here]
Travel Booking Procedures
Please use the company’s preferred booking platform [Platform Name] or speak to [Office Manager] to arrange accommodation and transportation for your journey.
Reimbursement Payment Procedures
Reimbursement claims should be submitted through [Finance Software] or you can submit an expense report with required documentation to [Finance Manager]. All claims should be submitted within [60 Days] after your trip.
Once approved, you will receive reimbursement within [Deadline].
Duty of Care
Travel insurance is provided through [Business Travel Provider]. In case of trip cancellations or changes, call [Contact Details of Travel Support Provider] or email [Contact Details].
While we’ve given you a basic expenditure policy template above, you’ll find additional samples online.
Yes, Microsoft Excel offers a wide selection of travel expense policy. Employees can use these to file a claim for travel expense reimbursement. Simply download the template, then fill in identifying details, department, purpose of travel, and all expenditure information into the dedicated spreadsheet fields.
A well-written policy will speak for itself, but your company’s expenses policy should also be a standard part of onboarding. Train employees how to use booking and expense management tools, keeping all documentation standard and compliant.
It’s also a good idea for employees to retain their own records. This saves time and money while reducing the chances of any disputes.
Finally, consider using an SME travel management solution like Booking.com for Business. This all-in-one travel platform includes an integrated traveller map and exclusive money-saving rates, so your employees benefit from full support no matter where their travel takes them.
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