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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