Sarah Daly explains what employers need to know about employee travel and subsistence allowances.
As an employer, you may require your employees to travel for work from time to time. Depending on the circumstances, your employees may be entitled to a travel and subsistence allowance for this travel.
Set out below are the answers to some frequently asked questions about employee business travel and subsistence payments.
What is business travel?
Business travel is deemed to occur when an employee travels on business to a destination that is not their normal place of work. Travel between an employee’s home and their normal place of work is not considered business travel.
How is business travel calculated?
Business travel is calculated in kilometres and is the lower of either:
- The distance between the employee’s home and the temporary place of work; or
- The distance between the normal place of work and the temporary place of work.
What if my employee uses their own vehicle for business travel?
If your employee uses their own vehicle for a business journey, you can pay them a tax-free allowance. There are two options — either:
- you can pay them the actual amount spent (they must provide receipts), or
- you can pay them an amount based on the Civil Service rates per kilometre.
What are employee subsistence payments?
If an employee is required to work away from their normal place of work, you may also repay them for their subsistence costs. Again, these payments can either be based on reimbursement of the actual amount spent (based on receipts) or based on the Civil Service subsistence rates.
Where can I find the Civil Service travel and subsistence rates?
The relevant Civil Service Rates can be found on the Revenue website.
How are travel and subsistence payments treated in the payroll?
If you make travel and subsistence payments to your employees, these should be run through the payroll as a tax-free addition.
What if I need help to manage travel and subsistence payments to my employees?
Outsourcing your payroll can be a great way to make sure that your payroll submissions are accurate and comply with the latest regulations. GroForth administers travel and subsistence payments for many of our clients as part of our outsourced payroll service. For details, please get in touch.
Nikki Johns, Payroll Manager