How to create an effective travel expense policy: Templates and examples

A travel expense policy sets reimbursement expectations and makes sure the company and its employees are on the same page, so a travel expense policy template is crucial. Plus, a clear policy helps with a broad range of travel-related processes, from decision-making to travel management and staying within budget.

In this guide, we’ll cover the definition and main features of a travel expense policy. We’ll also provide an expenditure policy template and examples for inspiration when creating a workable policy of your own.

Do employers have to cover travel expenses?

In most locales, employers aren’t legally required to cover employees’ travel expenses, but it’s a widely accepted business practice.

Specific requirements vary by country. For example, US federal law requires that companies pay for all time spent working, including travel time. However, this requirement doesn’t extend to travel expense reimbursement, which is up to the employer.

In the UK, there’s also no legal requirement to reimburse travel expenses, but employees and employers can claim these expenses for tax relief, incentivizing reimbursement.

What counts as a travel expense?

Before diving into the finer details of a travel and expense policy, it’s important to understand what counts as travel expenses.

These include any necessary expenses racked up during business travel, including meals, accommodations, plane and train tickets, public transportation, parking fees, mileage, and road tolls. Employees can also be reimbursed for money spent entertaining clients, partners, and prospective customers during business trips.

On the other hand, everyday costs like your weekday commute wouldn’t count as a travel expense. Most companies won’t pay for personal entertainment and clothing either, even if it was specifically purchased for business travel.

What is a travel expense policy for a business?

A travel expense policy is a written document, usually created by the business’s finance manager, outlining rules for business travel. It clearly lists travel expenses and defines which ones are reimbursable and to what limit. The policy will also state which expenses the employee will be expected to pay out of pocket.

Most travel and expense policies detail how employees should book and expense their travel, as well as how the company’s payment procedures work. For example, the document might outline whether employees can fly first or business class.

Here are a few additional details you might see on a travel expense policy template:

1. Preferred vendors
2. Travel insurance carrier
3. Permitted expenses and cost of booking
4. Approval process for travel
5. Travel support procedures

Why have a travel and expense policy?

With business travel, it’s important to set expectations. Employees are given guidelines for booking travel within limits, knowing exactly what they will and won’t be reimbursed for.

At the same time, you’ll be able to keep your employee travel within budget, reducing spending while retaining control. A clear policy reduces the chances of misunderstandings and the resulting frustrations over expense reimbursement. This creates a fair, stress-free travel booking and management process.

What should be included in a travel expense policy?

Your company’s travel and expense policy can be as simple or as complex as you want. At its most basic, this document should include the following sections:

Policy introduction

Travel expense policies start with an introduction outlining the purpose of the document, instructions for how and when to use it, as well as approval levels and contact personnel for the policy.

Reimbursable expenses

This is one of the most important components of any expense policy – it lists all the expenses that employees can be reimbursed for. You can break this section up by common travel-related costs, including airfare, accommodations, transportation, meals, and communication (e.g. mobile or WiFi charges).

Non-reimbursable expenses

Along with allowable expenses, your policy should include a bulleted list of expenses that won’t be reimbursed by the company. This helps travelers and travel bookers budget for their trips more effectively.

Travel booking process

The next section should include everything that travelers need to know about how to book business trips. Some companies will handle travel arrangements internally, while others will let employees manage their own travel with an approved platform like Booking.com for Business.

Expense reporting process

Outline processes that employees need to follow to receive their reimbursements, including actions for before, during, and after travel.

You can also include a section for travel support, insurance, and safety issues like duty of care. This lets travelers know who to contact if they need support during their trips.

How do I write a travel policy?

When the time comes to write a travel expense policy, you can refer to existing expense policy examples—there’s a wide variety available online—then create your own document.

Step 1: Create an overview

Start your policy document with a detailed introduction. This can include any identifying details about your company, along with its culture, standards, and reasons for creating this document. Give a brief overview of qualifying and non-qualifying expenses for reimbursement so readers can understand expenditure at a glance.

Step 2: List eligible groups

If everyone in your organization isn’t eligible for business travel reimbursement, make this clear after the introduction. Describe which departments, teams, or groups qualify for reimbursement, such as employees attending conferences and trade shows.

Step 3: List qualifying expenses

In this section, you should create an itemized list of all qualifying expenses for company reimbursement. Examples of categories include transportation, meals, and lodging.

Step 4: List non-qualifying expenses

Immediately after the reimbursable expenses, make it clear which expenses your company won’t pay for. It’s helpful to provide the reasoning behind these decisions in the document to make your company’s position crystal clear.

Examples of non-reimbursable items typically include things like:

• In-flight purchases
• Room service
• Minibar charges
• Childcare
• Pet boarding costs

Step 5: Outline travel booking procedures

The details of this section will depend on how your company prefers to book travel. Some businesses will leave booking to an office manager, while others will use a platform that allows employees to log in and book their own travel. In either case, describe the approved booking method or tool, as well as preferred vendors.

This section should also outline maximum nightly rates for accommodations, per diem rates for meals and expenses, rules for flying economy or business class, and permitted rental car class.

Another factor to consider in this section is whether your company allows employees to bring travel companions with them. Ask yourself:

1. Will approval from management be required?
2. Will family members’ travel be reimbursed?
3. Can travelers extend their business trips to include leisure time?

Step 6: List expense reporting requirements

Along with booking travel, it’s important that your employees understand how to report reimbursable expenses. You might use an automated tool or require paper receipts. No matter what method you choose, outline how to use your tool of choice. This section should share where to send expense reports, along with all the contact info and deadlines.

Step 7: Share safety and duty of care information

Close out your document with safety-related information to help travelers feel supported on the road. List contact details for travel support providers so employees know who to reach out to in case of cancellations, changes, and emergencies.

Travel expense policy template

You’ll find a variety of travel policy examples online. Here’s a basic expenses policy template you could use and adapt to your company’s needs.

[Business Name] Travel expense policy overview

This travel expense policy outlines how employees of [Business Name] will be reimbursed for work-related expenses. Some expenses incurred during company business may not be eligible for reimbursement, as listed in this expense policy.

Reimbursement eligibility

This policy applies to all [Business name] employees, both part-time and full-time, who need to travel for work-related purposes.

Qualifying travel expenses

[Business name] will reimburse eligible employees for the following expenses:

[List all qualifying expenses, including per diem rates and limits, here]

This list is not exhaustive. Please check any non-listed expenses with [HR/Finance Manager] before submitting a claim.

Non-qualifying expenses

[Business name] will not pay for the following expenses:

[List all non-qualifying expenses here]

Travel booking procedures

Use the company’s preferred booking platform [Platform name] or speak to [Office Manager] to arrange accommodations and transportation for your trip.

Reimbursement payment procedures

Reimbursement claims should be submitted through [Finance software], or you can submit an expense report with the necessary documentation to [Finance Manager]. All claims should be submitted within [60 days] after your trip.

Once they’re approved, you’ll receive reimbursement within [Deadline].

Duty of care

Travel insurance is provided through [Business travel provider]. In case of trip cancellations or changes, call [Contact details of travel support provider] or email [Contact details].

Where to find more travel and expense policy samples

We’ve given you a basic expense policy template above, but you can find more examples online.

1. Workable offers a sample employee expense policy in a downloadable .docx format, with blank spaces for you to fill with your company details.
2. Lattice provides a downloadable employee travel expense policy template, including sections for travel insurance, currency exchange, and more.
3. Institute of Travel Management is a good starting point with its selection of templates, but you have to become a member to access these resources.

Does Excel have an expense template?

Yes, Microsoft Excel offers a wide selection of travel expense policy. Employees can use these to file a claim for travel expense reimbursement. Just download the template, then enter identifying details, department, purpose of travel, and all expense info into the dedicated fields.

Final tips for creating a travel and expense policy

A well-written policy will speak for itself, but your company’s expense policy should also be a standard part of onboarding. Train employees to use booking and expense management tools, keeping all documentation standard and compliant.

It’s also a good idea for employees to retain their own records. This saves time and money while reducing the chances of any disputes.

Finally, consider using an SME travel management solution like Booking.com for Business. This all-in-one travel platform includes an integrated traveler map and exclusive money-saving rates, so your employees benefit from full support no matter where their travel takes them.