Travel reimbursement: Overview, definition, and example
What is travel reimbursement?
Travel reimbursement refers to the repayment of expenses an employee, contractor, or business representative incurs while traveling for work-related purposes. This typically includes costs like transportation, lodging, meals, and other necessary expenses. Companies often have policies outlining what qualifies for reimbursement and the process for submitting expenses.
For example, if an employee attends a conference on behalf of their company, the company may reimburse their flight, hotel stay, and meals during the trip.
Why is travel reimbursement important?
Travel reimbursement is important because it ensures employees and business representatives are not personally covering expenses for work-related travel. Clear reimbursement policies help businesses manage costs, ensure fair treatment, and comply with tax or labor laws.
For businesses, a well-defined reimbursement policy helps prevent disputes, ensures transparency, and sets expectations for what expenses are covered. Some jurisdictions also require employers to reimburse reasonable work-related travel expenses.
Understanding travel reimbursement through an example
A sales manager travels to another city for a client meeting. They book a flight, stay at a hotel, and take a taxi to the meeting. Their company has a travel reimbursement policy that covers airfare, lodging, and ground transportation. After the trip, the manager submits their receipts, and the company reimburses them for the approved expenses.
In another case, a consultant is hired by a company to provide on-site training. Their contract states that the company will reimburse travel expenses, but only for economy-class flights and mid-range hotels. If the consultant books a luxury hotel, they may only be reimbursed up to the policy limit.
An example of a travel reimbursement clause
Here’s how a travel reimbursement clause might look in a contract:
“The Company shall reimburse the Employee for reasonable and necessary travel expenses incurred in the course of performing their job duties, including transportation, lodging, and meals, in accordance with the Company’s travel policy. All expenses must be documented with receipts and submitted within [X] days of travel.”
Conclusion
Travel reimbursement ensures that employees, contractors, or business representatives are fairly compensated for work-related travel expenses. A clear reimbursement policy helps businesses manage costs, prevent disputes, and stay compliant with legal requirements.
Before traveling, employees and contractors should review their company’s travel policy to understand what expenses are covered and the process for submitting reimbursement requests.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.