Dear HR Colleagues,
As HR, I am required to set the policy on reimbursements for official travel (local and intercity) and the daily food allowances. We call this TA & DA in our company lingo, and currently, this is set as a per diem rate.
For example, TA for Executives for Metro cities is Rs. 100/-, and DA is Rs. 60/-.
This amount is given to the field employee for doing company work. We revise it once a year, but the petrol/diesel rates increase multiple times during the year, and the employees complain that the TA-DA is not adequate.
With the new budget released and an increase in petrol/diesel rates projected in the coming financial year, what could be a better way of structuring the travel and food allowance rates? Should it be a fixed per day rate; should it be a per km rate; or should it be kept on fixed liters of petrol/diesel? Or maybe there is another way...
The other issue is if it is on a per km or liters of petrol basis, how do I verify the authenticity of the claim and also control misuse?
I would appreciate inputs on how you handle this in your organizations and any suggestions you have for me.
Regards,
Rose
From India, Mumbai
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10As HR, I am required to set the policy on reimbursements for official travel (local and intercity) and the daily food allowances. We call this TA & DA in our company lingo, and currently, this is set as a per diem rate.
For example, TA for Executives for Metro cities is Rs. 100/-, and DA is Rs. 60/-.
This amount is given to the field employee for doing company work. We revise it once a year, but the petrol/diesel rates increase multiple times during the year, and the employees complain that the TA-DA is not adequate.
With the new budget released and an increase in petrol/diesel rates projected in the coming financial year, what could be a better way of structuring the travel and food allowance rates? Should it be a fixed per day rate; should it be a per km rate; or should it be kept on fixed liters of petrol/diesel? Or maybe there is another way...
The other issue is if it is on a per km or liters of petrol basis, how do I verify the authenticity of the claim and also control misuse?
I would appreciate inputs on how you handle this in your organizations and any suggestions you have for me.
Regards,
Rose
From India, Mumbai
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Hi Rose,
We have had that problem before. We have vehicles for management and a service minibus for the staff.
As time goes by, reimbursements are being abused. So we hired 1 car mechanic.
He's not only a mechanic but also records the kilometers, destination, check-in & check-out time, etc.
From the records alone, you can estimate mileage/gas consumption.
We gave memos to those individuals abusing in charge of their vehicles (including managers, and also our admin manager).
Some managers complain to me about why we hired someone to watch them.
I told them that they are not being watched, but rather we want them to be disciplined. Recording details about their travel is an SOP of any company.
We were surprised that in a month's time, we saved 50% of their travel expenses.
We did not only save on gas allowance but also on vehicle maintenance and repairs. We used to bring our vehicles to a car shop for maintenance and repairs.
So it's worth hiring a trusted mechanic whose loyalty is to HR.
Regarding food allowance, we provide it at fixed rates.
Hope this will help, Rose.
Jhun
From Saudi Arabia, Al Khobar
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We have had that problem before. We have vehicles for management and a service minibus for the staff.
As time goes by, reimbursements are being abused. So we hired 1 car mechanic.
He's not only a mechanic but also records the kilometers, destination, check-in & check-out time, etc.
From the records alone, you can estimate mileage/gas consumption.
We gave memos to those individuals abusing in charge of their vehicles (including managers, and also our admin manager).
Some managers complain to me about why we hired someone to watch them.
I told them that they are not being watched, but rather we want them to be disciplined. Recording details about their travel is an SOP of any company.
We were surprised that in a month's time, we saved 50% of their travel expenses.
We did not only save on gas allowance but also on vehicle maintenance and repairs. We used to bring our vehicles to a car shop for maintenance and repairs.
So it's worth hiring a trusted mechanic whose loyalty is to HR.
Regarding food allowance, we provide it at fixed rates.
Hope this will help, Rose.
Jhun
From Saudi Arabia, Al Khobar
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Thank you for your inputs, Jhun.
I like the idea of having a trusted mechanic to conduct and monitor vehicle repairs. As an additional clarification, my company has field operatives pan India in about 15 cities including Mumbai, Pune, Panaji, Ahmedabad, Bangalore, Hyderabad, Cochin, Chennai, Delhi, Jaipur, Indore, Chandigarh, Lucknow, Kolkata, Guwahati. The average number of operatives is around 2 per city, with more in Mumbai, Bangalore, and Delhi.
It would be difficult to arrange for a mechanic in each city and track the mileage on their vehicles' speedometer. It is for this reason we had implemented a fixed per diem travel allowance, but with frequent increases in petrol rates, the employees complain that the TA is not enough.
Any other suggestions, please.
Regards
From India, Mumbai
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I like the idea of having a trusted mechanic to conduct and monitor vehicle repairs. As an additional clarification, my company has field operatives pan India in about 15 cities including Mumbai, Pune, Panaji, Ahmedabad, Bangalore, Hyderabad, Cochin, Chennai, Delhi, Jaipur, Indore, Chandigarh, Lucknow, Kolkata, Guwahati. The average number of operatives is around 2 per city, with more in Mumbai, Bangalore, and Delhi.
It would be difficult to arrange for a mechanic in each city and track the mileage on their vehicles' speedometer. It is for this reason we had implemented a fixed per diem travel allowance, but with frequent increases in petrol rates, the employees complain that the TA is not enough.
Any other suggestions, please.
Regards
From India, Mumbai
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Hi again Rose,
Hmm, by the way, you're very much welcome. In our case, Rose, if we have some technical problems or major worries concerning operation, we have a group to study them. Believe it or not, our group consists of janitorial to managerial positions, but they are the most creative. And I'm a part of leading that group. Major problems take us days or weeks to find the right solution, but it's worth it.
If you want, I can assemble a team for you and discuss it in a teleconference. Make your decision and write me again.
Best Regards,
Jhun
From Saudi Arabia, Al Khobar
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Hmm, by the way, you're very much welcome. In our case, Rose, if we have some technical problems or major worries concerning operation, we have a group to study them. Believe it or not, our group consists of janitorial to managerial positions, but they are the most creative. And I'm a part of leading that group. Major problems take us days or weeks to find the right solution, but it's worth it.
If you want, I can assemble a team for you and discuss it in a teleconference. Make your decision and write me again.
Best Regards,
Jhun
From Saudi Arabia, Al Khobar
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Dear Jhun Good idea. Thanks again. Will consider making a study group to explore how we can develop an optimal travel reimbursement plan. regards Rose
From India, Mumbai
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From India, Mumbai
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Dear Rose,
Regulations on Travel Expenses
I. Objective
1. Due to the requirement of Company business or employee training, the Company will send these employees on a business trip to complete the Company assignments. The Company will reimburse the employee for appropriate travel expenses in line with the local living standard. In all cases, ostentatiousness and extravagance should be avoided as a mark of responsible good business practices.
2. The assigned employee for the business trip should complete the assignment as early as possible. During the travel arrangement, the employee will enjoy the opportunity for self-development such as "to enhance his/her experience" and "to know new friends." So, the employee should not try to take advantage of the travel expenses. The employee is required to report the travel expense in accordance with the Company accounting regulations.
II. Category
1. Short-Distance travel:
A business trip in India will be less than one day without staying overnight.
2. Long-Distance travel:
A Business trip will be more than one day in India Area. It is required to stay out overnight and accommodation.
3. Overseas travel:
A business trip is required to go abroad to complete the Company assignment.
III. Administration
1. It is required to fill out the Travel Order (TO) for all kinds of business travel and be approved by the concerned Department Manager beforehand. The employee should send the approved Travel Order to the HR Department with an Official Leave Request for filing.
2. Approval authorization:
a. TO for Short-Distance travel should be approved by the concerned Department Manager.
b. TO for Long-Distance travel and Overseas Travel should be approved by the General Manager via the HR Manager.
c. TO for Long-Distance travel and Overseas travel should be countersigned by the Financial Controller.
3. All employees are required to report Travel Expenses in consonance with the regulations in this policy. Certain specified employees who receive the General Manager's approval beforehand are entitled to report actual expenses.
4. The employee is requested to sign the agreement on Travel Order to avoid the argument about reporting the travel expenses when the employee returns to the Company. If the employee does not provide the necessary invoice or receipt for some expenses, those expenses will not be reimbursed.
5. The following expenses are not reimbursable: Unauthorized entertainment, personal alcoholic beverages, excess baggage charges for private purposes, and immunizations other than quarantine requirement.
6. The employee can apply to the Finance Department for a travel advance 3 days before departure. Advances and expenses report must be settled by the employee within 7 days of return to the Company.
7. The HR Department will assist the employee to apply for the visa, booking flight tickets, and insurance matters. The employee who will accept Overseas Training over 3 weeks will be requested to sign a service agreement for 2 or more years.
8. During the period of travel, it is required to inform the concerned Department Manager and HR Department by phone for an extension on business travel.
IV. Short-Distance Travel Rules:
1. Short-Distance Travel Expenses include meals & misc. charges and transportation fees. Meal & misc. expenses include meal charges, tips, telephone bills, and stationary expenses excluding fees paid to government agencies. Transportation expenses include train or highway bus tickets, taxi fare, and mileage allowance for using employees' private cars.
2. Meal & misc. expenses:
a. Standard for reimbursement:
Job title Breakfast & misc. Lunch & misc. Dinner & misc.
Supervisor and above $ $ $
Other $ $ $
b. Timing for eligibility:
One hour before or after 07:00 AM, eligible to report expenses for breakfast & misc. One hour before or after 12:00 noon, eligible to report expenses for lunch & misc. One hour before or after 18:00 PM, eligible to report expenses for dinner & misc.
Due to the special condition with the approval made by the Department Manager, the employee could report expenses for meals & misc. close to the above-mentioned time period. If the employee comes back from business travel over 24:00 PM, he is eligible to report expenses for dinner & misc. as a midnight snack.
c. The employee could ask the vendor for a meal expenses invoice or receipt if possible.
3. Transportation expenses:
a. The employee should take the train or public bus when the train, highway bus, or city bus is available to reach the destination. The employee should keep the ticket receipt to report the expenses.
b. Due to the consideration of area or route factors, the employee can use his/her car for a Company business trip after the approval made by his/her Superior (Department Manager and above level).
The employee will be reimbursed a mileage allowance of $___ per kilometer.
In principle, the Company does not encourage the employee to use his/her car for the Company business trip.
Except for the above-mentioned mileage allowance, the Company will not be responsible for any other expense.
c. When two or more employees go to the same destination for Company business at the same time, they should share the same transportation. One of the employees should pay the transportation expense. Those employees are required to report the expenses at the same time when they return to the Company.
V. Long Distance Travel Rules:
1. Long Distance travel expenses include lodging expenses, meals & misc. charges, transportation fees, and insurance premiums. Lodging expenses include room rate and tax.
Meal & misc. charges include meal charges, laundry, tips, mail, telephone bill, and stationary expenses excluding the fees paid to government agencies.
Transportation expenses include flight tickets, train, or mileage allowance.
Insurance premiums include accident insurance for travel.
2. Lodging expenses (Within the country):
a. The standard for lodging reimbursement:
Job title Taipei City Daily Room Rate Ceiling Other City Daily Room Rate Ceiling
Supervisor and above $ $
Other Emp. $ $
b. When the period of the Company business trip is over 30 days, the employee will receive 90% of the original daily rate starting the 31st day. The employee will receive 80% of the original daily rate starting the 61st day.
The employee should ask the Hotel to offer a discount for long-term lodging.
c. The employee should provide the invoice or receipt of the Hotel room rate.
d. When two or more employees take one room, one of them should pay the bill. They should send the expense report to the Finance Department at the same time.
e. Due to special reasons, the employee can book a high-class Hotel (room rate exceeding Company standard) after the approval made by the General Manager.
3. Meal & misc. expenses:
a. The standard for meal & misc. reimbursement is the same criteria applied to the Short Distance travel rules.
b. It is better to have the invoice or receipt for meal charges.
c. The employee can use the meal standard for Short-Distance travel to report the meal expenses on the day when the business trip is less than a full day long.
4. Transportation expenses:
a. Air transportation will be economy class confirmed space at discounted fares available to the Company. The employee should keep the flight ticket receipt to report the expenses.
b. Transportation expenses will be based on the same standard for Short-Distance travel.
5. Insurance Premium:
In addition to the coverage of labor Insurance, and National Health Insurance, Group Insurance, the employee who is on a business trip over 3 days will be eligible for two million NT Dollars in accident insurance coverage. The Company will pay the insurance premium. If the employee needs higher insurance coverage, he has to pay the difference in the premium.
6. Auditing:
The company Auditor in the Finance Department is authorized to audit the travel expenses and concerned matters.
If the customer who is visited by the employee offers the lodging or meal or provides the car service, those expenses should not be reported.
VI. Overseas travel rules:
1. Overseas travel expenses include lodging expenses, meals & misc. charges, transportation fees, and insurance premiums. Lodging expenses include room rate, collected cable TV, room telephone bill, tip, and tax.
Meal & misc. expenses include meal charges, laundry, tips, mail, telephone bill, stationary expenses, and taxi fare in the City.
Transportation expenses include flight tickets, public fees at the airport, and long-distance train or bus fares.
Insurance premiums include travel accident insurance and medical care insurance.
2. Lodging expenses and meal & misc. charges:
a. Due to different living standards around the world, the Company stipulates this travel expenses policy which is based on Government's promulgation of "payment criteria about the daily overseas allowance for central government employees who travel abroad on government business."
Payment criteria will be divided into 3 categories. The first category includes Japan, European countries, and New York City in the U.S.A. The second category includes U. S. A., Hong Kong, Seoul, and Bangkok. The third category includes other areas such as South-East Asia, Africa, Australia, central & southern America, and middle-east area.
b. Standard for lodging and meal & misc. reimbursement. (US$)
Job title Supervisor & above Other Employees
Expenses Room Rate Meal & Misc. Room Rate Meal & MISC.
1st Category $ $ $ $
2nd Category $ $ $ $
3rd Category $ $ $ $
c. When the period of the overseas business trip is over 30 days, the employee will receive 90% of the original daily overseas allowance starting the 31st day. The employee will receive 80% of the original daily overseas allowance starting the 61st day. The employee should ask the Hotel to offer a discount for long-term lodging.
d. If the training organization provides the lodging and meal service, the employee who participates in the training program will not be allowed to report the above-mentioned expenses.
3. Transportation expenses:
a. Air transportation will be economy class. Due to special business requirements with major customers, the employee can book the flight with business class after the approval made by the General Manager beforehand.
b.
From China, Shanghai
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Regulations on Travel Expenses
I. Objective
1. Due to the requirement of Company business or employee training, the Company will send these employees on a business trip to complete the Company assignments. The Company will reimburse the employee for appropriate travel expenses in line with the local living standard. In all cases, ostentatiousness and extravagance should be avoided as a mark of responsible good business practices.
2. The assigned employee for the business trip should complete the assignment as early as possible. During the travel arrangement, the employee will enjoy the opportunity for self-development such as "to enhance his/her experience" and "to know new friends." So, the employee should not try to take advantage of the travel expenses. The employee is required to report the travel expense in accordance with the Company accounting regulations.
II. Category
1. Short-Distance travel:
A business trip in India will be less than one day without staying overnight.
2. Long-Distance travel:
A Business trip will be more than one day in India Area. It is required to stay out overnight and accommodation.
3. Overseas travel:
A business trip is required to go abroad to complete the Company assignment.
III. Administration
1. It is required to fill out the Travel Order (TO) for all kinds of business travel and be approved by the concerned Department Manager beforehand. The employee should send the approved Travel Order to the HR Department with an Official Leave Request for filing.
2. Approval authorization:
a. TO for Short-Distance travel should be approved by the concerned Department Manager.
b. TO for Long-Distance travel and Overseas Travel should be approved by the General Manager via the HR Manager.
c. TO for Long-Distance travel and Overseas travel should be countersigned by the Financial Controller.
3. All employees are required to report Travel Expenses in consonance with the regulations in this policy. Certain specified employees who receive the General Manager's approval beforehand are entitled to report actual expenses.
4. The employee is requested to sign the agreement on Travel Order to avoid the argument about reporting the travel expenses when the employee returns to the Company. If the employee does not provide the necessary invoice or receipt for some expenses, those expenses will not be reimbursed.
5. The following expenses are not reimbursable: Unauthorized entertainment, personal alcoholic beverages, excess baggage charges for private purposes, and immunizations other than quarantine requirement.
6. The employee can apply to the Finance Department for a travel advance 3 days before departure. Advances and expenses report must be settled by the employee within 7 days of return to the Company.
7. The HR Department will assist the employee to apply for the visa, booking flight tickets, and insurance matters. The employee who will accept Overseas Training over 3 weeks will be requested to sign a service agreement for 2 or more years.
8. During the period of travel, it is required to inform the concerned Department Manager and HR Department by phone for an extension on business travel.
IV. Short-Distance Travel Rules:
1. Short-Distance Travel Expenses include meals & misc. charges and transportation fees. Meal & misc. expenses include meal charges, tips, telephone bills, and stationary expenses excluding fees paid to government agencies. Transportation expenses include train or highway bus tickets, taxi fare, and mileage allowance for using employees' private cars.
2. Meal & misc. expenses:
a. Standard for reimbursement:
Job title Breakfast & misc. Lunch & misc. Dinner & misc.
Supervisor and above $ $ $
Other $ $ $
b. Timing for eligibility:
One hour before or after 07:00 AM, eligible to report expenses for breakfast & misc. One hour before or after 12:00 noon, eligible to report expenses for lunch & misc. One hour before or after 18:00 PM, eligible to report expenses for dinner & misc.
Due to the special condition with the approval made by the Department Manager, the employee could report expenses for meals & misc. close to the above-mentioned time period. If the employee comes back from business travel over 24:00 PM, he is eligible to report expenses for dinner & misc. as a midnight snack.
c. The employee could ask the vendor for a meal expenses invoice or receipt if possible.
3. Transportation expenses:
a. The employee should take the train or public bus when the train, highway bus, or city bus is available to reach the destination. The employee should keep the ticket receipt to report the expenses.
b. Due to the consideration of area or route factors, the employee can use his/her car for a Company business trip after the approval made by his/her Superior (Department Manager and above level).
The employee will be reimbursed a mileage allowance of $___ per kilometer.
In principle, the Company does not encourage the employee to use his/her car for the Company business trip.
Except for the above-mentioned mileage allowance, the Company will not be responsible for any other expense.
c. When two or more employees go to the same destination for Company business at the same time, they should share the same transportation. One of the employees should pay the transportation expense. Those employees are required to report the expenses at the same time when they return to the Company.
V. Long Distance Travel Rules:
1. Long Distance travel expenses include lodging expenses, meals & misc. charges, transportation fees, and insurance premiums. Lodging expenses include room rate and tax.
Meal & misc. charges include meal charges, laundry, tips, mail, telephone bill, and stationary expenses excluding the fees paid to government agencies.
Transportation expenses include flight tickets, train, or mileage allowance.
Insurance premiums include accident insurance for travel.
2. Lodging expenses (Within the country):
a. The standard for lodging reimbursement:
Job title Taipei City Daily Room Rate Ceiling Other City Daily Room Rate Ceiling
Supervisor and above $ $
Other Emp. $ $
b. When the period of the Company business trip is over 30 days, the employee will receive 90% of the original daily rate starting the 31st day. The employee will receive 80% of the original daily rate starting the 61st day.
The employee should ask the Hotel to offer a discount for long-term lodging.
c. The employee should provide the invoice or receipt of the Hotel room rate.
d. When two or more employees take one room, one of them should pay the bill. They should send the expense report to the Finance Department at the same time.
e. Due to special reasons, the employee can book a high-class Hotel (room rate exceeding Company standard) after the approval made by the General Manager.
3. Meal & misc. expenses:
a. The standard for meal & misc. reimbursement is the same criteria applied to the Short Distance travel rules.
b. It is better to have the invoice or receipt for meal charges.
c. The employee can use the meal standard for Short-Distance travel to report the meal expenses on the day when the business trip is less than a full day long.
4. Transportation expenses:
a. Air transportation will be economy class confirmed space at discounted fares available to the Company. The employee should keep the flight ticket receipt to report the expenses.
b. Transportation expenses will be based on the same standard for Short-Distance travel.
5. Insurance Premium:
In addition to the coverage of labor Insurance, and National Health Insurance, Group Insurance, the employee who is on a business trip over 3 days will be eligible for two million NT Dollars in accident insurance coverage. The Company will pay the insurance premium. If the employee needs higher insurance coverage, he has to pay the difference in the premium.
6. Auditing:
The company Auditor in the Finance Department is authorized to audit the travel expenses and concerned matters.
If the customer who is visited by the employee offers the lodging or meal or provides the car service, those expenses should not be reported.
VI. Overseas travel rules:
1. Overseas travel expenses include lodging expenses, meals & misc. charges, transportation fees, and insurance premiums. Lodging expenses include room rate, collected cable TV, room telephone bill, tip, and tax.
Meal & misc. expenses include meal charges, laundry, tips, mail, telephone bill, stationary expenses, and taxi fare in the City.
Transportation expenses include flight tickets, public fees at the airport, and long-distance train or bus fares.
Insurance premiums include travel accident insurance and medical care insurance.
2. Lodging expenses and meal & misc. charges:
a. Due to different living standards around the world, the Company stipulates this travel expenses policy which is based on Government's promulgation of "payment criteria about the daily overseas allowance for central government employees who travel abroad on government business."
Payment criteria will be divided into 3 categories. The first category includes Japan, European countries, and New York City in the U.S.A. The second category includes U. S. A., Hong Kong, Seoul, and Bangkok. The third category includes other areas such as South-East Asia, Africa, Australia, central & southern America, and middle-east area.
b. Standard for lodging and meal & misc. reimbursement. (US$)
Job title Supervisor & above Other Employees
Expenses Room Rate Meal & Misc. Room Rate Meal & MISC.
1st Category $ $ $ $
2nd Category $ $ $ $
3rd Category $ $ $ $
c. When the period of the overseas business trip is over 30 days, the employee will receive 90% of the original daily overseas allowance starting the 31st day. The employee will receive 80% of the original daily overseas allowance starting the 61st day. The employee should ask the Hotel to offer a discount for long-term lodging.
d. If the training organization provides the lodging and meal service, the employee who participates in the training program will not be allowed to report the above-mentioned expenses.
3. Transportation expenses:
a. Air transportation will be economy class. Due to special business requirements with major customers, the employee can book the flight with business class after the approval made by the General Manager beforehand.
b.
From China, Shanghai
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(Fact Checked)-The method of hiring a trusted mechanic to track vehicle usage and implementing fixed rates for food allowance is a good practice to control expenses. However, it's important to note that ensuring compliance with labor laws and regulations regarding reimbursements is crucial. Implementing a solid verification process is key to prevent misuse and ensure fairness. It's advisable to have clear policies in place and consider industry standards when structuring travel and food allowance rates. (1 Acknowledge point)