In another post, we looked at the costs of food and drinks while traveling and how Per diems may make it easier to handle the corresponding paperwork. Usually more strict requirements apply for travel costs and it is not as easy to avoid the nitty-gritty. In this post I will focus on some principles and questions related to costs for domestic travel.
For travel within your home country specific local rules may apply. Especially car travel is subject to many rules, particularly from the tax office. For instance, tax authorities may cap the amount you can pay out for car travel without taxation. In the Netherlands, EUR 0.19 can be paid out per kilometer traveled by car without taxation on this payment. Anything above this amount is subject to tax as part of the person’s income.
To present the relevant number of kilometers, your team might use a tool like that of the ANWB (Dutch) or Michelin (French, international). They can put in their home address and destination and make a PDF print of the route, showing the total kilometers to travel, adding this as proof to their expense claim.
(Please note that I do not go into the rules around car lease. This is because to date I have not come across use of car lease constructions in the not-for-profit sector).
For public transport travel, a usual condition is to travel second class (also sometimes called coach class or economy class). Underlying documentation consists of original tickets which contain the route (from A to B), class (first, second), type (single or return), date and price. All this information is needed in order to establish whether or not the ticket is eligible for reimbursement. The stamped ticket itself forms part of proof of delivery along with documentation about the reason of travel (an event report for instance). It is important that the tickets you reimburse and save in your administration are originals. For copies it is after all not certain that you are the only one paying for them ….. In some cases, the quality of the paper of the tickets is such that you need to make a copy for legibility at a later time, but even so you should always also keep the original one on file, with faded print and all.
In many cases, no paper tickets are available anymore as travelers use a card to check in and check out of metro, bus, tram or train. In this kind of system, the traveler can register their card online, and create an account where they can view usage costs (click link for an example of an Oyster card report. Oyster is used in London, UK). Depending on the system, this information can be collected and presented for a certain number of weeks.
Online overviews provide the same kind of information as a ticket would and calculate the total costs incurred. The system at OV-Chipkaart in the Netherlands provides the possibility to select certain travels and present only these in an overview of costs. That way, the only travel costs shared are those relevant to the organization. In this system it is also possible to link multiple cards to one user, so that one user can follow movements on different cards and run reports on them.
Be clear that top up amounts are not yet costs! See here why.
Unregistered or anonymous card
In case a person does not want to register their card, they may be able to get a receipt slip of their most recent trips from a machine. Such slips usually provide less detail than an online report generates. They are usually printed on a type of paper that becomes highly illegible after a short while, so it pays off to copy them (but make sure you also keep the original paper on file!). The user must provide a clear link between the slip and their travel card, which can be done for instance through the card number if that is provided on the receipt.
In some countries there is also the possibility of purchasing public transport cards for staff, where the employer receives monthly overviews of travels and costs incurred per staff member included in this business card scheme. This is much easier for staff, as it puts the admin burden on the employer’s finance department. They will have to figure out if all travels were work related and will need to deduct non-work-related costs or costs for missed check-outs.
It may be possible to purchase a monthly, or yearly, subscription for a fixed daily commute. This would normally be cheaper than the total cost of all individual travels, if a person really does travel more than 3 days per week. In this case, the subscription card or other proof of subscription, along with the time sheets indication work done, can serve as proof. For this kind of reimbursement you may need to check with your tax office, as they may see part of the reimbursement as income for your staff (and thus subject to tax)..
If you reimburse staff – or external parties – for travel costs incurred, it is good to have a policy that explains to them what you will refund and what they need to do to make that possible (including what the deadlines are).
Check if domestic rules apply, and also check if any of your current funders has specific requirements for travel cost eligibility.
Prepare clear instructions, accompanied by a checklist and possibly a form to fill out, that your team can easily follow and apply. Be clear on the (monthly) deadline for submitting travel expense claims and underlying paperwork. If needed, make a sample file and/or conduct a one-hour workshop session on proper travel expense claims. (I have done both, and even made a video for one team showing how to make an online travel report and fill out an expense claim form).
Think of all the ways staff can meet challenges or make mistakes and think of solutions or rules. That does not mean your policy should include hundreds of pages of such potential problems and their answer. But your policy should outline an approach that will make it easy for finance staff to know the answer in case a new challenge appears. Think of fairly common problems like:
- I lost my ticket
- The machine did not give me a proper receipt
- I forgot to check out because I was in a hurry
- I mixed work and private travel and that is why the destinations don’t make sense
- I used my business card instead of my private card by mistake
And then think of what you answer will be if you hear this once, twice, or more …. Does that make a difference?
You may want to set a rule for how many mistakes the organization will cover and when the person him or herself should cover the costs (by repaying the organization or by getting a lower amount than costs claimed). And it is useful to put in writing how you will deal with the most common mistakes and how you may differentiate between first mistakes, second mistakes and recurring mistakes. This clarity and transparency will help your team know what to expect in case they make a mistake.