Travel Expense Reimbursement: A Complete Guide

Travel expense reimbursement is how employers pay back employees for out-of-pocket costs incurred on business trips. To stay tax-free, reimbursements must follow IRS accountable plan rules.

What expenses can be reimbursed

• Lodging: hotel stays or short-term rentals for business travel. Often reimbursed at the actual cost up to the GSA lodging cap.
• Meals & incidentals: covered via per diem or actual receipts. The GSA M&IE rate is the standard benchmark.
• Transportation: airfare, train, rental car, taxi, rideshare, and mileage if you drive your own vehicle.
• Parking and tolls: typically reimbursed at actual cost on top of per diem.
• Conference fees, business calls and essential supplies: can be included if the employer policy allows.

What is NOT reimbursable

• Personal meals when you are not away from home overnight.
• Commuting from home to your regular workplace.
• Alcohol, unless your policy explicitly covers client entertainment.
• Personal side trips added to a business journey.

How to submit a travel expense claim

• Complete an expense report with dates, destination and business purpose.
• Attach receipts for lodging and any out-of-pocket meals above the per diem limit.
• Attach a mileage log if you drove your own vehicle.
• Submit within the deadline set by your employer (typically 30-45 days after returning).

Tax-free vs. taxable reimbursement

Reimbursements within the GSA per diem rates, supported by a trip report, are generally tax-free. Amounts above the federal per diem, or any amount paid without documentation, become taxable wages. PerDiemWise calculates a GSA-rate total you can attach directly to your expense report.