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Travel Allowances: Keys to Effective Expense Management

Hotels, lunches, dinners, trips… Business trips generate expenses that companies must pay, either through reimbursements a posteriori or through travel allowances. The latter are characterized because the amount is fixed, and it is normal that they are paid to the worker before leaving on a trip.

In addition, travel expenses must be reflected in the payroll of workers, even if they are considered non-salary payments. This is so because they do not remunerate the work done, but rather compensate the expenses that occur when traveling outside the usual place of work. Accounting will be done in account 640.

This does not mean that travel allowances are listed or paid. In fact, they are income tax exempt as long as they do not exceed the following limits:

  • 53.34 euros for trips within Spain with an overnight stay and 26.67 euros without an overnight stay.
  • 91.35 euros for trips abroad with an overnight stay and 48.08 euros without an overnight stay.
  • Mileage expenses up to 0.19 euros per kilometer.
  • There are no limits for accommodation and public transport expenses.

At this point it is important to make a point clear. Companies must account for per diems correctly to avoid problems. These travel expenses are accounted for in group 62 of the General Accounting Plan (“Foreign Services”).

In order to communicate diets to the Social Security (through CRA files), they need to have the proof of expenses under control. It is essential to prove the day, place and reason for the trip. To do this, the tickets and invoices must include a series of data: number, company name, company name, CIF, establishment data, date, item breakdown, tax base and tax rate.

Are you still managing expense notes manually? You run the risk that the tickets and invoices end up being damaged or lost. You won’t get either traceability of expenses nor will you be able to export them automatically to your ERP.

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Advantages of digitizing the management of travel allowances

This is when professional travel expenses digitalization solutions become especially relevant. Like Okticket which, being approved by the Treasury, allows you to get rid of paper once the expense has been uploaded to the application. More advantages:

  • Customization of the app based on your organization’s travel expense policy.
  • Configuration of different types of diet per employee and amount.
  • Facilitates compliance with tax obligations… And obtaining tax benefits.
  • automatic posting accommodation and living expenses.
  • Organized information, something very useful before a tax inspection.
  • Saving time and resources. Thanks to the agility of the solution, the finance department can spend more time managing data, making predictions for the future, improving margins… In short, dedicating themselves to other activities that provide added value to the company.

Also, you can Control spending before it happens. As? Providing mobile employees with a company card that allows for personalized configuration. With the OKT Card, Okticket’s smart debit card, you can set limits per user, per spending category, per period of time, etc. The expenses made with the card are reconciled automatically.

Original okticket tax article for the Easy&Smart Guide 2023.

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