Definition
After a business trip, no employee is spared: the travel expense report. At first glance, the listing of costs seems to be done quickly. But there are a few things to keep in mind when preparing it. Here you will learn everything you need to know about the correct travel expense report.After a business trip, no employee is spared: the travel expense report. At first glance, the listing of expenses seems to be done quickly. But there are a few things to keep in mind when preparing it. Here you can find out everything you need to know about the correct travel expense report.
What is a travel expense report?
- in the travel expense report, all costs related to a business trip are compiled.
- Travel expenses, costs for overnight stays and meals as well as incidental travel expenses can be reported.
- Companies can claim travel expenses for tax purposes.
- Employees are reimbursed for their expenses by their employer via the travel expense report.
- Flat rates can be applied for accommodation, meals and travel expenses.
- To substantiate the expenses, the travel expense report must contain invoices and receipts.
- There are no formal requirements for the listing.
What is the travel expense report needed for?
Companies can reimburse employees for travel expenses free of payroll tax. For this to be possible, a clear travel expense report with all receipts must be available.
This statement is also the prerequisite for companies to be able to claim the travel expenses for tax purposes. The travel expense report serves as proof that the employee's trip was actually a business trip. The costs can then be deducted as operating expenses.
The preparation of a travel expense report is not required by law. Accordingly, companies are not obliged to reimburse their employees for travel expenses or per diems for overnight stays. If they do not do so, employees can deduct these costs themselves as advertising expenses on their income tax return. They must also submit the relevant receipts for this.
In what form must a travel expense report be prepared?
There are no formal requirements for preparing a travel expense report. In theory, a handwritten summary is sufficient. It is important to collect all invoices and receipts for the expenses incurred.
In practice, it is easy to lose track of travel expenses when they are listed manually. Many employees overlook important items or forget, for example, to enter the incidental travel expenses.
The Circula travel expense app ensures that you always have an overview of your travel expense report. For employees, this is a great advantage in order to have their expenses reimbursed by their employer. Businesses also benefit from an accurate list to be able to deduct the costs from their taxes.
What information must be included in the travel expense report?
Although there are no formal requirements for the travel expense report, it should contain the following information:
- Who undertook the business trip? (Name, employee number)
- How long did the trip last?
- When did the trip start and when did it end?
- What was the destination of the trip?
- What was the purpose of the trip?
The travel expense report must be signed by the respective employee. In addition, all receipts for the costs incurred shall be attached. If there are no more receipts, a so-called "own receipt" can be added in exceptional cases.
Info: Own receipt
If you can no longer find the invoice or receipt for an expense, you can create your own receipt. It can be recognised by the tax office as a substitute receipt. Employers can also recognise the substitute receipt for the reimbursement of expenses. In addition, if receipts are lost, the personal receipt is important in order to comply with the accounting principle: "No entry without receipt".
In principle, however, the personal receipt should always be the exception. With the Circula travel expense app, you always have your invoices and receipts at hand and minimise the risk of having to issue your own receipt. This way you can be sure that all expenses will be recognised by your employer or the tax office. For businesses, original invoices or receipts are also important because they are allowed to deduct input tax.
If you still have to issue a self-receipt, it must contain the following points:
- Full name and address of the payees
- Type of costs
- Date of service
- Details of the service
- Reason for self-receipt
- Signature
What is a business trip anyway?
Travel expenses cannot be calculated as a lump sum for every activity outside the workplace. For example, if you are visiting a customer whose company is only a few kilometres away from yours, you cannot claim travel expenses.
Your journey is considered a business trip if the following conditions are met:
- The destination of your trip is outside the city limits.
- There are personal contacts with business partners outside your own company in other cities or regions.
- You are travelling to a branch office of your company. The distance from your place of work to the branch office must be longer than the distance from your place of residence to the place of work.
- You are visiting a trade fair, a further training course or a conference in another town or country.
- The stay does not last longer than three months. After this period, the tax office usually counts the destination as a regular place of work.
What counts as travel expenses?
In principle, the travel expense report includes all costs incurred during a business trip. This includes the following items:
- Travel costs: These include costs for train or plane tickets, costs for rental cars or public transport.
- Accommodation costs: Here, the costs for hotels, lodgings, boarding houses or guest rooms are listed.
- Additional expenses for meals: If you are travelling on business, you cannot eat as usual. Thus, costs for meals and drinks during the business trip can be summarised in the travel expenses.
Incidental travel expenses: This includes everything that does not fit into the items listed above, but is relevant to the business trip. These can be, for example, the costs for the WLAN in the hotel or parking fees.
What does not count as travel expenses:
- Fines for driving without a ticket or speed cameras.
- Costs for drinks from the minibar in the hotel.
- Wellness treatments.
It is important that employees list all expenses exactly and comprehensibly in the travel expense report and keep the corresponding receipts. Especially with frequent business trips, this accounting can become very time-consuming. The Circula travel expenses app helps you to keep track of your travel expenses.
How are commuting expenses reported in the travel expense report?
In principle, all costs incurred for the outward journey to the destination, journeys at the destination and the return journey are taken into account. These journeys may be made by private car, rental car, plane, train or taxi. In order for travel expenses to be claimed, the business trip may not be undertaken in a company car.
If public transport, taxis or rental cars are used, the travel costs will be reimbursed in full with the corresponding receipt or can be declared for tax purposes. If you use your private car for the business trip, flat rates or the individual kilometre rate apply.
In principle, you must keep a logbook if you want to claim travel costs with your private vehicle as travel expenses.
- Kilometre allowance: If you use this option, you can claim 30 cents per kilometre for travel costs. If you travel by motorbike, the flat rate is reduced to 20 cents per kilometre.
- Vehicle-specific kilometre rate: This calculation is somewhat more complicated. For this, you have to divide the total annual costs for your private car by the number of kilometres driven per year. You then multiply this figure by the kilometres driven during the business trip.
The individual kilometre rate has an advantage especially for high-value cars, because depreciation, fuel costs, rent for parking spaces, repair costs, taxes and insurance are included in the annual costs.
How are accommodation costs reported in the travel expense report?
Anyone who has to spend the night away from home on a business trip can claim these costs. For business trips in Germany, overnight expenses can be settled in full or claimed for tax purposes if the costs are supported by invoices.
TIP: Companies can not only reimburse overnight accommodation costs to their employees free of wage tax, but also claim input tax of seven per cent.
The reimbursement of accommodation costs via the travel expense report is possible over a period of 48 months. This also applies to the deduction of overnight expenses as advertising costs.
If the business trip takes place abroad, either the actual amounts can be listed in the travel expense report or it is possible to claim a lump sum. The amount of the lump sum varies from country to country.
It can become very time-consuming to check the travel expense report with regard to possible flat rates. Circula's travel expense software relieves you of this work and makes the settlement of travel expenses for business trips abroad much easier. Here you will find everything you need to know about the accommodation allowance.
How is the additional subsistence expense listed in the travel expense report?
In principle, it is assumed that meals cost more on business trips than at the workplace. Those who are on a business trip can be reimbursed up to 28 euros per day as additional meal expenses free of wage tax. This lump sum applies to business trips within Germany. It can only be reduced, an increase is not possible.
In the travel expense report, the additional expense for meals can be calculated in this way:
- You are on a business trip for more than eight hours. Then 14 euros per day can be claimed.
- A lump sum of 14 euros can also be claimed for the day of arrival and departure.
- If the trip lasts longer than one day, up to 28 euros per day can be charged as a lump sum for additional subsistence expenses.
The per diem can be reduced if customers take over lunch or breakfast at the destination. The per diem is then reduced by 40 or 20 per cent.
For business trips abroad, other per diems apply, as the legislator assumes that catering abroad leads to higher or correspondingly lower additional costs.
With the Circula travel expenses app, you don't have to worry about flat rates. The tool automatically takes into account the current flat rates.
What counts as incidental travel expenses?
Incidental expenses of a business and official trip can also be listed in the travel expense report. These are all expenses incurred during the business trip but which are not directly related to accommodation, travel or meals.Incidental travel expenses include:
- Telephone charges
- Tips
- Entrance tickets, e.g. for trade fairs or conferences
- Tolls
- Insurance
Should travel expenses be reimbursed by the employer or not?
Employees can have their travel expenses reimbursed by their employer free of wage tax via the travel expense statement. However, these costs can then no longer be claimed as advertising costs via income tax.
Since employers are not obliged to reimburse travel expenses, employees can also opt for deduction via advertising costs.
In order for this option to be worthwhile from a tax perspective, the travel expenses must exceed the lump sum for advertising expenses of 1,000 euros per year.
Make travel expense reporting via app simple and secure
With the Circula travel expenses app, you have an overview of all business travel expenses at all times. After the trip, all costs can be settled simply, transparently and in a time-saving manner. A clear win-win for employees and companies.