How are daily allowances paid?
The most common questions asked by employees and employers on the Internet are:
- What are daily expenses for a business trip?
- Daily allowance and travel allowance: what is the difference?
- Is per diem paid for 1 day of business trip?
- Is per diem allowed on weekends while on a business trip?
Daily allowance (travel allowance) or daily allowance for business trips are additional expenses of an employee for living outside his place of residence (paragraph 4, part 1, article 168 of the Labor Code of the Russian Federation).
What is included in daily and travel expenses? Daily expenses (or daily allowances for business trips) include employee costs for food and similar daily needs . But expenses for travel (on a business trip and back home) and accommodation (for example, in a hotel) are paid to the employee separately. They are not included in travel expenses (per diems).
According to labor law, the employer must pay daily allowances for business trips:
- for each day an employee is on a business trip (daily allowances are calculated, including for weekends and holidays, days on the road, days of forced stop);
- sick days if the employee gets sick during a business trip.
If the employee was sent on a business trip, but can return home from there every day, in this case he is not paid . The decision on the daily return of the employee in each specific case is made by the manager, taking into account:
- range of the place of assignment;
- transport connection;
- purpose of the trip.
But daily allowances for traveling nature of work are paid in accordance with Art. 168.1 of the Labor Code of the Russian Federation, since such workers have constant work on the road.
As for the period for payment of daily allowances for business trips, it is not approved . It is more logical and correct to pay the business traveler an advance for daily expenses before the start of his business trip. Currently, the maximum duration of a business trip within Russia and beyond its borders has not been established . Therefore, it is very important to correctly calculate the advance for a business trip so that the employee is not left without money in a foreign city or country.
Income tax
When calculating income tax, daily allowances are not standardized (subclause 12, clause 1, article 264 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated February 6, 2009 No. 03-03-06/1/41). Include them in expenses in the amount provided for by the collective agreement or local regulations of the organization: orders, Regulations on remuneration, regulations on business trips, etc. (Article 168 of the Labor Code of the Russian Federation). The size can be set either fixed or based on actual expenses.
Situation: is it possible to take into account daily allowances when calculating income tax if an employee is sent on a one-day business trip around Russia?
Yes, you can. But not as part of travel allowances, but as part of other expenses associated with production and sales.
The list of business trip expenses that can be taken into account when taxing profits is given in subparagraph 12 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation. These include:
- expenses for employee travel to the place of business trip and back to the place of permanent work;
- expenses for renting residential premises;
- daily allowance or field allowance;
- costs for processing and issuing visas, passports, vouchers, invitations and other similar documents;
- consular, airport fees and other similar payments and fees.
Daily allowances are not paid if the employee is sent to an area from where he can return daily to his place of permanent residence (clause 11 of the Regulations approved by Decree of the Government of the Russian Federation of October 13, 2008 No. 749, clause 15 of the Instructions of the Ministry of Finance of the USSR, the State Committee for Labor of the USSR and the All-Russian Central Council of Trade Unions dated April 7, 1988 No. 62). And since daily allowances are not required for a one-day business trip, amounts paid to an employee cannot be classified as travel expenses when calculating income tax.
At the same time, the organization is obliged to reimburse the business traveler not only the daily allowance, but also travel expenses, rental accommodation, as well as other expenses incurred with the permission or knowledge of the employer. This is established by Article 168 of the Labor Code of the Russian Federation.
That is, these payments can be considered as reimbursement of employee expenses caused by the need to perform labor functions outside the place of permanent work (residence). Consequently, they can be taken into account when calculating income tax on the basis of subparagraph 49 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation - as other expenses associated with production and sales. But provided that they are enshrined in a local regulatory act of the organization (for example, a collective agreement) and are documented (Article 252 of the Tax Code of the Russian Federation).
Similar clarifications are contained in letters of the Ministry of Finance of Russia dated May 26, 2014 No. 03-03-06/1/24916, dated May 21, 2013 No. 03-03-06/1/18005.
Attention: if the organization does not have primary documents confirming the expenses incurred by the employee, inspectors may have claims regarding the recognition of these expenses. Request the relevant documents (checks, receipts, etc.) from the posted employee.
Amounts paid to an employee in lieu of daily allowance for a one-day business trip cannot be confirmed with the same travel documents as regular daily allowance. That is, unlike daily allowances for business trips of several days, in this case you will need primary documents reflecting the actual expenses of the business traveler.
This is explained by the fact that financial department specialists classify these costs not as daily allowances, but as other costs associated with production and sales. And such expenses must be confirmed by relevant primary documents (checks, receipts, etc.) in the general manner (Article 252 of the Tax Code of the Russian Federation).
Daily allowance amount
Accountants and personnel officers often look for information about the abolition of travel and daily allowances, a decree that cancels these expenses. There is no such resolution . But there is a Decree of the Government of the Russian Federation dated December 26, 2005 No. 812 “On the amount and procedure for payment of daily allowances in foreign currency and allowances for daily allowances in foreign currency for budget employees on business trips in foreign countries.” It was last amended on July 19, 2019. It describes how per diem is paid on a business trip.
For travel expenses, each employer determines the amount of daily allowance independently and enshrines this in its internal regulations - an order or regulation.
How much is the daily allowance? The fact is that in paragraph 12 of Art. 217 of the Tax Code of the Russian Federation specifies a daily limit when issuing daily allowances for business trips, which is exempt from personal income tax .
For a business trip in Russia it is 700 rubles, and daily allowance in foreign currency cannot exceed 2500 rubles. for each day of a business trip abroad.
How much per diem to pay - 100 rubles or 700 rubles - is decided within each company based on the distance of business trips, transportation support, etc.
The employer is not required to pay one-day daily allowances , since if the employee has the opportunity to return home on the same day, he does not incur additional expenses. Therefore, daily subsistence allowances are not paid for one day of business travel. The basis for this is para. 4 clause 11 of the Regulations on business trips.
If an employer decides to accommodate employees and pay daily allowances for a business trip for 1 day, he faces risks associated with taxation. In this case, the very legal nature of the concept “what is daily allowance on a business trip” is lost, as stated in the letter of the Ministry of Labor of Russia dated November 28, 2013 No. 14-2-242. In other words, daily allowances are not paid .
Daily allowance for one-day business trips
If a business trip lasts only one day, then the employee is not entitled to daily allowance. This is directly stated in paragraph 11 of the Business Travel Regulations. But many organizations and entrepreneurs still pay daily allowances even for one-day business trips. Do I need to pay personal income tax and contributions on them?
The Russian Ministry of Finance believes that everything depends on the availability of supporting documents. If the employee has submitted them, then the payment for a one-day business trip, although it cannot be considered per diem, can be classified as another category of travel expenses. Namely, to other costs agreed with the employer. Then the payment in full is exempt from income tax and contributions (letter dated May 17, 2018 No. 03-15-06/33309; see “Personal income tax on daily allowances for a one-day business trip: the Ministry of Finance has changed its position”).
A similar conclusion was made in the resolution of the Arbitration Court of the Volga-Vyatka District dated January 24, 2020 No. A43-18056/2019 (see “The court clarified whether it is necessary to charge contributions for “per diems” for one-day business trips”). And in the resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated September 11, 2012 No. 4357/12 (see “SAC: payments in lieu of daily allowances for one-day business trips are not subject to personal income tax”).
Per diem allowance for a business trip abroad
Payment of daily allowances for business trips outside the Russian Federation is made in the following order:
- when staying and traveling around Russia, daily allowances are paid in the amount established by internal order or in accordance with local instructions on business trips in Russia;
- when staying and traveling through the territory of a foreign state, payment of daily travel expenses is made in the amount of 2,500 rubles per day (remember that this is a limit not subject to personal income tax).
Moreover, the procedure for paying daily allowances to business travelers is such that when crossing the territory of Russia - when the employee is just going on a business trip - the date of travel across the border of the Russian Federation is included in the days when daily allowances are paid in foreign currency . But when an employee returns from a business trip, the border crossing date is included in the days when daily allowances are paid in rubles.
EXAMPLE
Employee Sergeev S.S. sent from Moscow to Vilnius from March 1 to 5. The plane flies to Vilnius on March 1 at 7 a.m., and already on March 1 Sergeev S.S. is located in Vilnius. Therefore, the employee will receive the daily allowance for March 1 “at the foreign rate.” If Sergeev S.S. took off at 23:00 and landed in Vilnius at 0:50 on March 2, then for March 1 he would receive daily allowance according to Russian limits, and for March 2 - as abroad.
What is the daily allowance for on a business trip abroad? The same as in Russia: such payments cover the traveler’s expenses for food and the purchase of household items, since he is located outside his place of residence.
Reflection of excess daily allowances in 6-NDFL
Due to the fact that excess daily allowances are considered income and are taxed, it also needs to be reflected in the 6-NDFL reporting. The date of receipt of income will be considered the date of approval of the advance report, and the date of calculation of personal income tax will be the date of the next salary payment (since the actual payment and report will not always be the day the salary is issued).
Form 6-NDFL is submitted quarterly. In section 2 of the calculation, the amounts of excess daily allowance must be reflected in the corresponding quarter when the business trip report is approved and it must be filled out in this way according to the lines:
100 – report approval date
110 – next salary payment date
120 – date of transfer of tax from the next salary
130 – amount of excess daily allowance
140 – personal income tax withheld from these daily allowances.
How to determine daily allowance on a business trip
Travel expenses (per diem) must be paid before the start of the business trip and for all days spent on a business trip, starting from the date of departure and including the date of return.
Payment of daily allowances on weekends on a business trip is also made immediately. Regardless of whether the business traveler was resting or working that day.
It happens that they decided to send an employee on a business trip, signed an order and paid travel allowances. However, due to operational necessity or employee illness, the business trip was decided to be canceled or postponed. Then it is necessary to prepare an order to cancel the business trip or change its dates.
Daily allowances are also being waived. That is, the employee must return the money received if the trip does not take place.
EMPLOYEE'S STATEMENT FOR TRAVEL ALLOWANCE RETENTION: SAMPLE
It happens that an employee returns from one business trip in the morning, and in the evening he flies to another. That is, 2 business trips in one day. In this case, the daily allowance for this day is paid only for one business trip.
Let's look at an example of how to pay for 2 business trips according to the new rules. Let’s assume the daily allowance is 700 rubles.
EXAMPLE
Ushanov M.Yu. I was on a business trip in Saratov from March 1 to March 3, and on March 3 in the evening I had to fly to St. Petersburg. He will return back only on March 7th. How is the daily allowance paid in this case?
From March 1 to March 3: daily allowance must be accrued for 3 days.
From March 3 to March 7: must be credited within 4 days.
If the employee is entitled to 700 rubles. for daily allowance, then the amount of travel expenses for both business trips will be 3 × 700 + 4 × 700 = 4900 rubles, respectively.
