Feb 27, 2024
Employers offer their employees a travel allowance for accommodation, transport, and food during a business trip. But there’s more than one way for a company to cover these expenses.
In this article, you’ll discover your options for supporting the expenses your employees incur during business travel.
When your employees travel for business reasons, the company should provide a travel allowance to cover the costs of their travel expenses, including transport, accommodation, and food.
Each company’s approach to covering an employee’s travel expenses will vary, but these are the most common approaches:
The average company spends around 10% of their annual revenue on travel — so it’s essential to take the right approach when it comes to travel allowances. But that’s not simple when costs fluctuate, and there’s uncertainty around the global economy.
Business travel compensation is an alternative name for business travel allowances. Depending on your company’s travel policy, it can be used to cover:
Two commonly used approaches for covering business trip allowances include: handing employees a flat travel allowance (per diem) or covering all incurred employee travel expenses.
Let’s look at each of these in more detail and reveal a third option for ground travel. 👇
Companies that pay a flat travel allowance give employees a fixed amount of money to spend as needed. If an employee spends more than this, they’ll be expected to cover the costs themselves.
Giving business travellers a fixed basic travel allowance is a straightforward approach that comes with several advantages:
The downsides of a fixed travel allowance far outweigh the advantages:
In this case, employers cover all incurred costs during business trips.
Frequent business travellers may have a company card to use during their trip. But, most employees are expected to use their own money and submit expense reports.
As submitting expense reports uses up valuable working time, it’s worth exploring quicker ways to make a claim. Fortunately, several expense management tools can speed up claiming expenses.
Expecting your employees to use their own money and claim back the expenses incurred is time-consuming and potentially puts financial pressure on your employees. But there are some possible upsides with this travel allowance approach:
While there are benefits to reimbursing all employee expenses, there are potentially more drawbacks for employees and employers:
A transport allowance is one of the most essential allowances during a work-related trip — after all, you will be on the move.
As with allowances that cover other expenses, you may be given a company card or a daily allowance (per diem). But these are now both outdated ways of paying for business travel. And this is where Bolt Business will support your corporate travel needs.
With Bolt Business, employers can give employees a company payment method to use when travelling for work with the Bolt app.
When a company creates a Bolt Business account, the employees can set the company as a payment method for work rides in their Bolt app. This allows them to charge rides straight to the company without manually reporting expenses.
To cover the costs of meals during a trip, employers may provide a business travel meal allowance. It can work in one of three ways:
The downside to the third option is that it leaves your employees out of pocket until they’ve submitted an expense report, waited for approval, and received reimbursement — which can take several days.
Another option is to use Bolt Food for Business.
When your company creates a Bolt Business account, you can give certain employees permission to order food and groceries in the Bolt Food app using a company payment method.
Travel allowances are an essential part of any business trip. And the approach you take towards allowances for employees could influence the success of those trips.
Flat travel allowances (per diem) and expense reimbursement (actual incurred costs) both have their pros and cons., so it is important to consider the specifics of each trip before deciding.
Additionally, a transport allowance is crucial for any business trip, and Bolt Business is a great solution to address this need. Remember, getting travel allowances right is essential for both employers and employees, and it can make all the difference in the success of a business trip.
The Bolt app gives you a convenient way to travel in 45+ countries and 500+ cities — and you can use it as a business travel app, too.
With a Bolt Business account, you can give your employees a travel allowance in the Bolt app. These spending limits can be daily, weekly, monthly, quarterly, annually, or for one time only — and travellers can’t exceed the spending limit.
Implementing travel allowances in this way means that you’ll only ever cover each traveller’s actual transport expenses. And by getting dropped off at your destination, there are no unexpected parking fees.
Set your employees up for a successful business trip by giving them a business travel allowance with Bolt Business.
Get answers to some frequently asked questions about travel allowances.
Employers give a personal travel allowance to employees when they’re travelling for work. The company should support employees with the costs of transport, accommodation, and meals during the trip.
Start by reading your company’s travel policy; they may already offer a travel allowance. If not, provide a detailed breakdown of the expected costs during your trip and explain why the trip benefits the company.
Following your trip, follow up with your employer and provide proof of all purchases for which you wish to claim expenses.
Some companies will provide you with a company card, allowing you to charge expenses straight to your employer. Other companies will expect you to submit expense reports to claim your outgoings. Remember to hold onto your proof of purchase if this is the case.
