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
Five most expensive cars sold at Pebble Beach These classic cars went for seven figure sums at the world's premier classic car event. More
Seats that move! Rain! Movie-watching goes beyond 3D How can movie theaters compete when many prefer to watch streaming video from their own comfy couches? Some hope a new interactive technology will lure audiences with immersive effects. More
15 cool cars for sale at Pebble Beach While these events are best known for seven-figure classics, just about everything crosses the block at Pebble Beach. More
Sponsors