Should I pay my employees for travel time?
In order to carry out their normal work obligations, employees often travel for a certain amount of time away from home. It can be due to a client contract in a different state or country or because a worker is required to teach employees in an interstate office on a program.
While not everyone likes the early commute to work, for some employees, it is an unavoidable aspect of their job. You should compensate your employees fairly for any task that requires them to travel to locations other than their regular place of work.
This post discusses the guidelines for working while traveling and the need to calculate all costs, reimbursements accurately, and allowances. So let's get started.
Costs
Specifying how the travel expenses will be compensated if you have employees who must travel for work as part of their duties is crucial. Here are a few examples:
- The employer gives the employee property for business-related travel, such as a company car, vouchers, or fuel card.
- The company covers travel costs by making advance reservations and lodging, food, and transportation payments.
- Alternatively, the employer pays the employee's travel costs in advance and reimburses them afterward; or
- The employee is given a travel allowance or a lump sum payment to offset the expected travel expenditures.
Let your staff members know whatever approach you decide to use for your organisation. You should also consider if an employee should be allowed to use company property for personal or work purposes only.
Stipend or allowances
Nowadays, almost all awards and certain enterprise agreements include a vehicle or travel allowance to compensate workers for paying for travel expenses. You should urge employees to maintain a thorough logbook of their work-related travel as this is sometimes expressed as a per-kilometre charge.
This includes keeping track of the odometer at the outset and finishing each trip to ensure you're giving them a suitable allowance. You could choose to add a vehicle allowance to the annualised pay amount for your salaried employees.
Estimating the employee's annual mileage will be necessary, which might not always be simple to determine. If you're uncertain, round it up again. When it only amounts to a few cents per mile, the last thing you want is to file an underpayment claim.
Reimbursements
Ensure to instruct your employees to collect and save receipts for expenditures that must be provided to the company before reimbursement is granted. Moreover, we recommend you set up a policy defining what constitutes fair and unjustified costs, or, if you prefer, one that involves upfront business approval of all expenses.
Travel period
Travel time for business reasons should be reimbursed since it falls under the same category of duties as taking calls, creating reports, and offering customer support. However, the expense of travel to and from work is often carried by the employees themselves, so there is no need to compensate for this.
Some awards or enterprise agreements have exceptions, such as when an employee is temporarily transferred from their primary place of employment. Before choosing to cover such travel expenses, review the applicable award or agreement.
Calculating travel time to work
One of the significant concerns of company owners with travel time compensation is calculating it so that payments are accurate, efficient, and equitable. RosterElf is a time clock software that lets you quickly and automatically keep tabs on your workforce's whereabouts and working hours.
It can also help you manage the intricacies of overtime compensation, arrange rostering and scheduling of your employees, reduce travel time, and ensure that everyone can focus on the tasks that truly matter.
RosterElf: rostering made easy
RosterElf’s cloud-based payroll and rostering software truly is a game-changer. Say goodbye to roster conflicts and chase employees for their availability to work. Instead, employees can easily update their availability to work and notify managers about it through a smartphone app.
Staff set the times and days they can work, and RosterElf does the rest. Our software then automatically suggests available employees to fill shifts.
What are you waiting for? Time to take your rostering and payroll game to the next level and boost your business’ performance. Call us now, and our team will be more than happy to assist you.
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