A travel reimbursement policy is developed to help employees understand and follow the company’s travel reimbursement process. A comprehensive policy that gives specific guidance about many aspects of employee travel situations, including permissible prepaid travel expenses, categories of and conditions for travel expenses to be reimbursed, and what categories of travel expenses will not be reimbursed.
The cost of travel is deductible for the employer and nontaxable for the employee if it is an ordinary and necessary business expense and is accurately reported.The purpose of this policy is to: (i) Describe the types of expenditures that are reimbursable by the company.(ii) Inform employees of their responsibilities to control and report travel and entertainment. (iii) Describe the process for an employee to file and obtain travel expenses and reimbursement.
Travel expenses must be properly documented and approved on a Travel Expense Report. It is each employee’s responsibility to adhere to the policy when involved with expenditures on behalf of the company. Further, it is the responsibility of the manager to be familiar with the reason for the expenditures and to be satisfied that they have been reported in a manner consistent with the recognized policy.