Can You Offer Combined Business And Personal Travel As An Employee Perk?
Posted on: 6 October 2022
Most small businesses have to send their employees on trips for various company purposes—ranging from networking and trade shows to specialized instruction and launching new products.
Want a simple way to add an employee perk that costs your company little but adds a valuable benefit for employees? Then consider allowing the combination of business and personal travel in a flexible arrangement. Here's what you need to know about this potentially effective perk.
Does Travel Flexibility Matter to Employees?
When a business allows travel flexibility on business trips, it means that employees can tailor their trip to include elements of a vacation. The benefit to employees is that the company generally pays for some of the biggest costs—such as air travel or mileage—and they get to vacation for less.
How much your employees get out of this, of course, depends on where you send them. If your continuing education classes are held in the middle of nowhere, employees may not be itching to spend vacation days. However, if your annual trade show is in sunny Southern California or near Disney World, employees might love some extra time and savings.
How Can You Set Up a Good Travel Policy?
If you want to extend this benefit, you'll need to set up a good, clear system. Start by discussing with your accountant what types of expenses the company can deduct as business travel and what types of reimbursement must be declared as taxable employee compensation. Many times, for example, companies can deduct hotel costs for the entire weekend as long as Friday and Monday are work days.
Then, decide what your company will pay for and what it won't. If you're on a budget, you might just have the company pay for deductible business days and business meals. However, if you can be more generous, you might add things like a per diem allowance for nonbusiness days or flight costs for spouses — even if these aren't tax deductible by the company.
Finally, write a policy for how employees can take advantage of the program. Determine what the company will arrange and pay for directly as well as how employees may be reimbursed for expenses they pay. Make sure everyone understands the parameters before they hit the road.
Where to Start
Depending on how you structure your flexible travel policy, you might see little or no extra cost beyond what you would otherwise pay for a business trip. But your employees could see large, nontaxable benefits in the arrangement. Begin by learning more about business and personal travel accounting standards and IRS rules. Meet with an accounting service in your state today to get started.
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