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Common reimbursable expenses and rates.

Oct. 1, 2026-

When employees travel overnight on company business, naturally they can be fully reimbursed. (As a precaution, you should check with your tax advisor and/or the IRS regarding the following tips.)

Indeed, there are multiple Internal Revenue Service overnight-travel rules to keep in mind for reimbursing employees.

The IRS says employees cannot be reimbursed tax-free when traveling for personal reasons. You can reimburse their business expenses when they’re gone for one night but they stay for a weekend, if staying over costs less than paying for an extra flight home and back.

 

You can reimburse their business expenses when they’re gone for one night but they stay for a weekend, if staying over costs less than paying for an extra flight home and back.

 

Overnight travel pay rules

Travel time during an employee’s normal working hours must be paid as hours worked even on weekends.

Driving for company business outside normal hours must has to be compensated. Of course, any required work performed while traveling counts as paid hours. That includes brief telephone calls or answering emails.

However, not compensable is the time as a passenger on a plane, train, or in a car outside of regular work hours.

Incidentally, if accompanied by their spouses, expenses for the spouses cannot be reimbursed if they’re not there for your business reasons.

Per diem

It’s possible for you to use a combination of per diem allowances and direct expenses. Per diem is a fixed amount for each day your employees travel. Your employees don’t have to keep records when use per diem rates.

Varying by location, you might use per diem rates to reimburse employees for hotels, meals and incidentals.

Another shorter and simple method of computing the federal per-diem rate are high-low rates. But with hotels, meals and incidentals, you can’t use high-low rates. Bear in mind for your employees, regular per diems are often more advantageous.

 

Bear in mind for your employees, regular per diems are often more advantageous.

 

While employees do not need to save or submit individual receipt slips for meals, lodging, or incidental expenses, substantiation is required to satisfy IRS Accountable Plan rules. Required are dates of departure and return for the trip, location and the reason for travel or the business benefit.

 

Avoid IRS Pain – Employee Expenses vs. Compensation

 

Meals and mileage

Employees can be reimbursed for meals if they’re traveling overnight.

Car expenses can be fully reimbursed. The 2026 IRS mileage rates:

Naturally, if you choose, you can elect to use a lower per-mile rate.

With telecommuting employees, you can reimburse them for travel when they leave their home offices for your business office. Expenses can be reimbursed tax-free if your employees leave their homes to go for meetings with clients or to visit contracting sites.

 

HR – Compliance with DOL Rules for Remote Workers

 

For other tax-free reimbursements, here are additional travel-related situations:

  • Employees traveling for the day.
  • Special one-day job assignments.
  • Travel for temporary locations. But the expenses are taxable if it’s likely the work will last longer than 12 months.

Conclusion

Again, as a precaution, you should check with your tax advisor and/or the IRS. Legalities can change each year, including the mileage reimbursement rates.

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“We’ll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.”

-Dave Barry

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.