Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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.

Subscribe to Top Stories
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

airbus_a350_2.03.jpg
Ask FSB
Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
Your name:
* Your e-mail address:
* Your city:
* Your state:
* Your daytime phone #:
* Your questions:

(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

Photo Galleries
Top luxurious hotel suites for business travelers For many people, you can't put a price on comfort. More
Million-dollar startups: These firms scored big sales their first year Their first year in business, these companies generated $1 million in sales. More
The 10 best states for retirees It might be worth moving to a new place to find your dream retirement home. Check out these 10 states. More
Sponsors