FORTUNE Small Business:

Travel is on the employee's clock, not yours

Travel to work isn't on-the-clock time - our experts say you don't have to cover time your staff spends en route.

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(FORTUNE Small Business) -- Dear FSB: If an employee has to fly to his job, do I owe him for flying time? And is it exempt or non-exempt?

- Dan Morse, Houston

Dear Dan: Generally speaking, employees are not on the clock when travelling to work. This applies to all modes of travel - auto, mass transit, and yes, air. For that reason, commuting expenses are generally not tax deductible.

Mohamed Idris, a tax professional at tax preparation firm Idris & Sons in New York City, says that even if the employee is going to another location, such as a client's office or a conference, the time spent on the road does not count as being on the job.

"You get paid when you arrive at work," Idris says. But, he adds: "The employer can specify in the original job contract that travel will be covered, if he wants to be generous." In that case, the time spent travelling is treated as any other work time.

Regardless of whether the time spent travelling is paid or not, the costs incurred during that travel are 100% deductible. If your employee is paying for the trips out of pocket, then the employee can claim the plane fares and accommodation costs (if any) as valid business expenses. On the other hand, if you are reimbursing the employee for all expenses, then you claim the entire deduction.

So while the cost of the flight is a valid business expense, you don't owe the employee anything for his time in air. To top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.