Term
Travel order
The document by which an employer sends an employee on a business trip and in which meal allowance, travel, accommodation and other costs are settled on return. It supports both the reimbursement and its deduction as a tax expense.
Updated
What it means
A travel order is the document by which an employer sends an employee on a business trip in writing and which is used to settle the trip afterwards. Before the trip it shows the place and time of departure and return, the purpose, the means of transport and any advance; afterwards, the actual times and costs.
It underpins travel allowances: transport, accommodation, the meal allowance according to the trip’s length and other necessary costs such as parking or fees. For a trip abroad the foreign per diem and possibly pocket money are added.
The form is not prescribed and it can be on paper or electronic, in the payroll or attendance system. What matters is that it shows who ordered the trip, that the trip was work-related and what costs arose, with receipts for them.
How it works in practice
When settling, we check that departure and return times are right, because the meal allowance depends on them, and that the allowance was reduced for meals provided. If the employee used their own car, the mileage allowance is added based on kilometres and fuel consumption.
With a company car the trip is also entered in the mileage log, and its data should match the travel order. Mismatched dates and kilometres are a typical tax audit finding and call fuel costs into question.
Allowances within the limits of the Travel Allowances Act are deductible for the employer and not taxable for the employee. Directors and sole traders use the same document for their own trips, although the rules for them differ in some respects.
What to watch out for
The most common mistake is travel orders filled in retrospectively at year end for a whole series of trips. Auditors ask about the purpose of a specific trip, the meeting or the customer, and if it cannot be shown, the allowances are not deductible and may become taxable for the employee.
The employee should submit the settlement within the statutory time and the employer should pay it promptly. An unsettled advance sitting in the books for months is an error to be cleared by a deduction from pay or a refund.
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