Are there any Federal or state requirements for reimbursing employees for business related travel/entertainment out of pocket expenses? What about requiring the IRS mileage reimbursement rate? We are a smallish company with both salaried and commission compensated employees.
Has anyone seen any surveys regarding employers reimbursment rate policies?
Mileage reimbursement is currently at 56.5 cents per mile. you can also reimburse on a daily rate for meals without receipts but I do not advocate such an approach as it is open to unnecessary expense and abuse, a communicated policy for what you consider reasonable costs per day (say $10-15 breakfast, 10-15 lunch, not to exceed $50 for dinner), but no receipt, no reimbursement. Book flights centrally as most abuse is pandering to peoples airline preference (for miles) when less expensive flights are available. This also applies to Hotels and Hotel chains. my best advice is to set up an online reservation service with Concur/BCD, online bookings run about $10 per transaction verses $35 when you call an agent.
My best wishes with this challenge, it is all achievable and the degree of ease will depend on existing entitlements. Keith...
The IRS has extensive requirements for reimbursable expenses so they are not considered compensation. See Publication 463. In general, this covers ordinary and necessary expenses incurred for a business purpose. Generally, anything over $25 needs a receipt. The mileage rate is easy to manage, but if you have a large driving population, you may want to consult with companies that manage these programs in detail and can provide more cost effective alternatives. One I have worked with in the past is Runzheimer. Strong policy and expectation setting is key to managing this spend. Try to instill a "spend the company money as if it were your own" mentality. An automated system is best to make this process efficient and well controlled.
Make sure you have a written reimbursement policy that is distributed to all employees. I would concur on Concur - it is easy to use and does a lot of the background work for you.
I would agree that there are tools to help automate the process for you but there are solutions that are cheaper, much easier to implement, have more functionality for a company your size, and have more service to come up with the best solution for your situation.
