Explains how to claim for Per-diems or other Rate Based Expenses
What is a Per-Diem
Most expenses are claimed from a receipt reimbursing the employee the actual cost of the incurred expense. Per-diem's and other rate based expenses reimburse employees a fixed amount irrespective of the actual incurred costs. This approach is adopted by many employees to cut down on administration for lots of small receipts and as an employee benefit.
Be sure to check your country's tax policies before implementing a per diem policy. Expense reimbursements at cost for legitimate business costs are not normally subject to income tax however providing over-sized per diem amounts instead of extra income is often subject to income tax and failure to pay tax on these employee benefits can be tax evasion. The US Govt. publishes a schedule of reasonable per diem amounts and most companies stick to or go below these amounts to avoid the per diem reimbursements from being considered income tax.
A rate based expense (other than a per diem) is nothing other than another expense paid at a fixed rate, for example a month's worth of internet or mobile phone usage (if your company pays a fixed amount for these items) or a breakfast allowance. Refer to this section for information on mileage claims.
Claiming for a Per-Diem or Rate Based Item
To make a claim for a per-diem create or edit your expense claim and select the appropriate rate-based or per diem expense type. You will get a popup as outlined above where you must enter:
- A description
- The number of nights or units claimed. Enter the correct unit of measure e.g. "each" or "month", or just enter a number with no unit if you want the system to default the unit of measure for you
- The amount is calculated automatically. You cannot edit it.
Receipts are not normally required for per-diem or rate based expense claims.
Setting up a Per-Diem or Rate Based Item
Your system administrator can set up per diem or other rate based expense categories or types in expense type settings.
It is important to edit or set the unit amount or amount to reimburse for each per-diem etc. for each company code in your organization before allowing employees to claim expenses.