Compensation for the traveling nature of work - insurance premiums for drivers

The employer must establish compensation for employees for the traveling nature of their work. And of course, I would like to make them so that they are not subject to personal income tax and insurance premiums. Is it possible? We are talking about compensation for the traveling nature of work in 2021 from the perspective of accounting.

Also see:

What should be the provisions regarding the traveling nature of work?
Taxi payments for commuting to work during the coronavirus period: how to process and accept them as expenses

What does labor law say?

An employee who has a traveling nature of work, in accordance with Part 1 of Art. 129, art. 149 and art. 168.1 of the Labor Code of the Russian Federation, the employer must establish additional cash payments. They are aimed at compensating employees for costs associated with the performance of their work duties.

Such payments and compensation include:

Additional payment for travel . This bonus is compensatory in nature and is part of the salary. The additional payment can be established by a local regulatory act (for example, Regulations on the traveling nature of work), a collective agreement, an agreement or an employment contract.
Reimbursement for business travel expenses. These may include expenses for renting accommodation, travel, as well as other expenses that the employee made with the instructions or permission of the employer. The list of reimbursable expenses is open . Also, the law does not limit the amount of compensation. The employer sets the size independently, taking into account the requirements of Part 2 of Art. 168.1 Labor Code of the Russian Federation. The only thing that is important to remember is that the compensation amounts should not be unreasonably underestimated .

Next, we will analyze these payments in more detail.

Reimbursement of expenses according to documents

Payment of the premium in the cases under consideration is not mandatory. However, the Labor Code of the Russian Federation provides for the need to compensate for additional expenses associated with the performance of labor duties during traveling work.

Article 168.1 determines that, given the nature of the work in question, it is necessary to compensate for the following types of expenses:

Payment for travel.
Expenses associated with rental housing.
Expenses associated with living away from home.

Additional types of compensation may be included in cases where the administration of the enterprise agrees with this.

It should be noted that the mandatory nature of the mentioned types of compensation occurs if this profession or position was included in the list of traveling workers and the employee’s employment agreement contains information that he is hired for such work.

Travel surcharges

An allowance or additional payment for traveling work is not required . But the employer can set it at his own discretion. Only the reimbursement of expenses mentioned above is required.

Thus, in labor legislation there is no direct prohibition on establishing a fixed additional payment for travel to an employee as compensation for expenses incurred by him. Moreover, these payments are in no way related to the employee’s achievement of work results. The company must take into account that such an additional payment must fully compensate the employee’s possible expenses for travel, renting accommodation and other agreed expenses.

But with this type of compensation for travel, inspectors may have questions. Especially if there are no documents that confirm the expenses incurred by the employee. In this case, the amounts of additional payments made cannot be considered compensatory. This is what the Russian Ministry of Labor thinks. This position is set out in letter dated September 30, 2014 No. 17-4/B-462).

In the case of fixed compensation for the traveling nature of the work, the employment contract must make reference to the Regulations, which stipulate the amounts and conditions for receiving such allowances. Or you need to indicate the amount of additional payment in the employment contract itself.

You can study in more detail the issue of drawing up an employment contract for traveling work in our material “What should be an employment contract regarding the traveling nature of work.”

Compensation for traveling nature of work 2021

An employee whose work is of a traveling nature has the right to compensation payments. Firstly, the employer is obliged to compensate him for the expenses incurred. This obligation is established by Art. 168.1 Labor Code of the Russian Federation. In addition, in addition to this, the organization can establish a procedure for paying such an employee a salary supplement. These two concepts must be separated and the specifics of each must be taken into account when preparing and paying them. The procedure for their accounting and taxation depends on this. The salary supplement and reimbursement of expenses incurred are not mutually exclusive and can be applied by the company simultaneously.

Salary supplement

Its amount is set by the organization independently. The procedure for its calculation is prescribed in local regulations.

In some cases, the percentage of bonus payment is determined at the legislative level. To date, some legislative acts from the USSR era regulating this issue continue to be in force. For example, Resolution of the Council of Ministers of the RSFSR No. 579 of December 12, 1978. If the employee’s profession is included in the list approved by the Resolution, then the amount of the bonus is approved by law. For example, compensation for the traveling nature of work for intercity line drivers is 1.5% of the monthly rate per day. The Resolution contains a clause stating that their work activities are constantly taking place on the road. The second part of the document considers workers who systematically travel within an assigned area (for example, engineers, controllers, cashiers). They are entitled to 20% of the monthly official salary.

If the amount of an increase in salary for the traveling nature of work is not established by law, then the employer has the right to set a percentage increase at its discretion. This decision needs to be enshrined in the LNA.

Reimbursement of expenses incurred

Article 168.1 of the Labor Code of the Russian Federation obliges persons who are required to have a traveling nature of work to be reimbursed for the costs of:

travel;
rental housing;
additional expenses associated with living outside the place of permanent residence (daily allowance and others);
other reasonable expenses made with the permission of the employer.

To pay compensation, you must have documents confirming the expenses incurred. To avoid abuse by others, it is possible to set limits for reimbursement of expenses in the LNA. In addition, if it is planned to pay daily allowances to this category of employees, their amount must also be approved in local regulations. The amount of daily allowance can be set in any amount at the discretion of the organization’s management.

Taxes and contributions from compensation payments

The fixed additional payment is taken into account as part of the salary. It is subject to both personal income tax and insurance premiums in the general manner. It is also included in tax expenses (letter of the Ministry of Finance dated March 26, 2012 No. 03-04-06/9-76, clause 3 of Article 255 of the Tax Code of the Russian Federation).

But targeted compensation for the traveling nature of work is not subject to insurance premiums and personal income tax.

EXAMPLE
Option 1
An employee with a traveling nature of work is paid a monthly bonus of 5,000 rubles, calculated in such a way as to cover the employee’s possible expenses on work trips. This means that the amount of 5,000 rubles is subject to both contributions and personal income tax.
Option 2
An employee in traveling work is reimbursed monthly for the expenses he incurred in the process. The amount is determined based on the report and primary documents provided to them. This means that such a payment is considered compensation and is not subject to personal income tax and contributions.

The amount of compensation for travel is included in income tax expenses on the basis of the employee’s supporting documents (letter of the Ministry of Finance dated July 6, 2018 No. 03-04-05/46903).

Compensation for traveling nature of work: personal income tax

Taxation of payments to employees who have a traveling nature of work with personal income tax depends on the type of payment:

The salary supplement is recognized as part of the salary (clause 3 of Article 255 of the Tax Code of the Russian Federation). Therefore, it is necessary to withhold personal income tax from it in the usual manner. This point of view is confirmed by the Ministry of Finance in Letter No. 03-04-06/9-76 dated March 26, 2012.
Reimbursement is a compensation payment. Consequently, it is not subject to personal income tax on the basis of paragraph. 11 clause 3 art. 217 Tax Code of the Russian Federation. But it is very important that the expenses incurred have documentary evidence: railway, air, bus tickets, hotel bills, etc.
IMPORTANT!
The Letter of the Department of Tax and Customs Policy of the Ministry of Finance of Russia dated April 19, 2017 No. 03-04-06/23538 provides clarifications on this topic. Compensation for expenses for the traveling nature of work is exempt from personal income tax under conditions where the nature of the work is reflected in an industry agreement, collective agreement or other local act.
Daily allowances are paid in the amount established in the LNA. Limits have been established for daily allowances for business trips in the sense of personal income tax. Daily allowances when moving within the territory of the Russian Federation are not subject to personal income tax in the amount of 700 rubles, and when moving abroad - in the amount of 2,500 rubles. From daily allowance payments in excess of these amounts, personal income tax must be calculated and withheld from the employee. Does this rule apply to daily allowances paid for traveling work? This issue is not regulated by law. Article 166 of the Labor Code of the Russian Federation directly states that traveling work is not a business trip. Consequently, the daily allowance limits established for business trips do not apply to traveling work. Please note that this position may raise questions from the tax inspectorate. But if you are ready for a dispute, you can safely not include daily allowances for employees with a traveling nature of work in the personal income tax base.

Accounting for amounts for traveling work

When calculating and paying compensation for expenses incurred, the following accounting entries are made:

Debit 20 (26, 44) Credit 73 – compensation was accrued to the employee for expenses incurred for travel, accommodation, etc.;
Debit 73 Credit 50 (51) – compensation paid.

IMPORTANT!
Funds for compensation can be issued in advance. In this case, they should be recorded as accountable amounts.

EXAMPLE
At the beginning of the month, an employee with a traveling nature of work was given an advance payment for expenses on a business trip of 3,000 rubles:
Read also: How to correct inaccuracies and errors in a work book
Debit 71 Credit 50 – 3000
Upon returning, the employee submitted an advance report with supporting documents in the amount of 3,500 rubles to the accounting department. On the date of approval of the report, the accountant made the following entries:
Debit 44 Credit 71 – 3500 – reflects the amount of the employee’s reimbursable travel expenses;
Debit 71 Credit 50 – 500 – overexpenditure to the employee was compensated according to the approved report.

The amount on the advance report is also not subject to personal income tax and insurance premiums.

Situation overview

The Labor Code of the Russian Federation, in Articles 57, 166 and 168.1, provides detailed explanations on the definition of the mobile nature of work, the concept of business trips and the composition of reimbursable expenses.

According to the law, reimbursable expenses for the mobile nature of work are exempt from personal income tax and contributions to social funds, but are legally accepted for calculating income tax. In this regard, during on-site inspections, tax specialists pay special attention to primary documents that confirm the legality of compensation for the traveling nature of work.

There are several types of compensation:

compensation payments for actual costs;
additional payment included in the salary.

Categories of work

Legislative acts of the Russian Federation do not specify a closed list of professions and positions that require constant travel.

According to the proposed conditions, the work is divided into several types:

mobile,
traveling,
on my way,
different nature of work.

Enterprises consistently compile a list of professions whose job descriptions include long or permanent travel.

It is advisable to define a list of such professions in many industries:

in construction,
on the railway,
in road transport,
mining.

A collective agreement or order of the organization approves the register of positions with mobile conditions of production activity.

Results

Compensation for the traveling nature of work can be paid in various ways. When choosing any of the options, it is necessary to provide for this condition in the local regulatory act of the company, collective or employment agreement.

If the additional payment is set in a fixed amount, it is considered part of the salary and is subject to personal income tax and contributions. If payments to the employee are of a compensatory nature according to the documents provided by him, personal income tax and insurance contributions do not need to be calculated from them.

How is the traveling nature of work formalized?

Since many more people work on the road than is stipulated by law, employers have to fix their allowances themselves. To establish the amount of compensation for the traveling nature of work, the following documents must be completed:

a separate clause in the employment contract. In accordance with Article 57 of the Labor Code of the Russian Federation, travel is an essential working condition. The employer must warn about them in advance, and the employee must agree or refuse;

section in the collective agreement. It should indicate a list of professions and positions that require travel, the essence of the relevant activity, documents for recording trips (time, daily allowances issued, etc.). In return, you can publish a whole regulation where this issue will be covered in as much detail as possible;

job description. If there is a clause in it about constant work while traveling, the allowances will be justified.

Compensation for the traveling nature of work is carried out on the basis of supporting documents. These could be transport tickets, hotel bills, receipts from gas stations. This also includes invoices from catering establishments or receipts from stores proving the existence of food expenses.

For one-time trips, the work is not traveling

The legal adviser of our organization travels for several hours to various government agencies and organizations once a week for operational reasons. In addition, we employ a household appliance repairman who mainly performs work in the service center and only occasionally travels to clients. Is it possible to establish a traveling nature of work for them to compensate for travel expenses?

Your employees' work is not traveling. In order for you to compensate your legal adviser and appliance repairman for travel expenses, it is not at all necessary to call their work traveling. It is enough that they submit travel documents to the accounting department. At the same time, you determine the list of employees with a traveling nature of work yourself. Therefore, you can include in it not only employees who move to distant sites (often located in another locality), but also those who, due to the nature of their work, move within one locality. For example, couriers, insurance agents, sales representatives, etc. And even if you include workers who occasionally leave the office, it won't be a violation, but it won't increase the workers' reimbursement costs either. After all, they are not entitled to a daily allowance, and you can only compensate them for travel expenses.

A “traveling” employee can be sent on a business trip

The employee has a traveling job. We had a need to remove him from the facility where he is currently employed and send him for a week to one of our contractors in another city to complete a specific task. Do I need to arrange a business trip for him to do this?

Yes need. You send an employee for a certain period of time to perform a specific assignment in a locality outside the territory where he usually works. That is, on a business trip (Article 166 of the Labor Code of the Russian Federation). And traveling work is not a business trip.

Corporate income tax

The taxpayer reduces the income received by the amount of expenses incurred, with the exception of the expenses specified in Art. 270 of the Tax Code of the Russian Federation. Expenses are recognized as documented and justified expenses, which are understood as economically justified expenses, the assessment of which is expressed in monetary form (clause 1 of Article 252 of the Tax Code of the Russian Federation).

Expenses in the form of compensation for expenses for the traveling nature of work (in this case - in the form of daily allowances), confirmed by primary documents drawn up in accordance with the requirements of accounting legislation, satisfy the above criteria and, therefore, can be taken into account as part of other expenses associated with production and sales, as of the date of approval of the advance report (clause 49, clause 1, article 264, clause 5, clause 7, article 272 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated 04/01/2010 N 03-03-06/1/211, dated June 14, 2011 N 03-03-06/1/341, clause 2 of the Letter of the Federal Tax Service of Russia dated August 6, 2010 N ShS-37-3/8488).

The Tax Code of the Russian Federation has not established a standard within which daily allowances for traveling work are included in expenses for profit tax purposes. Consequently, daily allowances, the amount of which is established by a local act of the organization (employment contract), can be fully taken into account for profit tax purposes.