You can pay your employees' expenses when they travel on business journeys. You can also pay subsistence if employees are working away from their normal place of work.
You can repay your employees when they use their private cars, motorcycles or bicycles for business purposes.
This section explains the types of travel that can qualify for these repayments.
The “normal place of work” is the place where theemployee normally performs the duties of his/her employment. In most cases, this should not give rise to difficulty.
The employer’s business premises will be regarded as the normal place of work for an employee where:
- travel is an integral part of the job involving daily appointments with customers; or
- the duties of the employment are performed at the various premises of the employer’s customers but substantive duties are also performed at the employer’s business premises.
An employee’s home would not be regarded as the normal place of work unless there is an objective requirement that the duties of the office or employment must be performed at home. It is not sufficient for an employee merely to carry out some of the duties at home.
Usually, the employer will provide the facilities necessary for the work to be performed at the business premises. Even where an employee has to do some work at home or to keep some equipment at home, the place where he/she resides is a matter of personal choice and it would not be regarded as a place of work.
A business journey is one in which an employee travels from one place of work to another place of work in the performance of the duties of his/her employment but will generally involve a temporary absence from the normal place of work.
Journeys between an employee’s home and place of work (and vice versa) are not business journeys and any reimbursement of motoring expenses (including taxi fares) in respect of the cost of such journeys is taxable. This includes:
Travel between Ireland and Overseas
Where an individual employed in the State is obliged to travel to a foreign location to temporarily perform the duties of his/her employment there, both the outward and the return journey home may be regarded as a business journey.
Business Travel involving travel directly to/from home
Where an employee proceeds on a business journey directly from home to a temporary place of work (rather than commencing that business journey from his/her normal place of work) or returns home directly, the business kilometres should be calculated by reference to the lesser of -
- the distance between home and the temporary place of work; or
- the distance between the normal place of work and the temporary place of work.
Where employees use their private cars, motorcycles or bicycles for business purposes, and the employees incur the total cost of such usage (e.g. insurance, tax, running costs, etc.), then the reimbursement in respect of the cost of business use can be made free of tax by the employer by reference to either -- (I) flat-rate kilometric allowances (see A below); or
(A) Reimbursement by way of Flat-Rate kilometric allowances
Kilometric allowances are calculated using a standard costs system to determine the motoring/bicycle expenses which may be paid free of tax by employers in respect of travel expenses incurred by employees on allowable business journeys. The system applies where the car, motorcycle or bicycle is owned by the employee and all motoring/bicycle expenses are met by the employee.
There are two types of flat-rate allowance schemes which are acceptable for tax purposes. In both cases, a satisfactory recording and internal control system must be operated by the employer.
Where the employee bears the cost of the relevant travelling expenses, this Scheme provides that the reimbursement of such expenses in accordance with the prevailing schedule of Civil Service kilometric rates may be made free of tax.
The schedule of rates based on the current relevant Civil Service kilometric rates are set out hereunder.
Where the employee bears the cost of the relevant travelling expenses, this Scheme provides that the reimbursement of such expenses in accordance with the schedule of rates, which do not exceed the prevailing schedule of Civil Service rates, may be made free of tax.
Either reimbursement Scheme may be applied without specific Revenue approval.
(B) Reimbursement by reference to actual costs incurred Where motoring/bicycle expenses are reimbursed by employers to employees on the basis of actual costs incurred, then the amount so reimbursed will generally not exceed the amount which would be payable in respect of the allowable business trips under the prevailing schedule of Civil Service rates.
Where an employee’s actual motoring/bicycle expenses are reimbursed free of tax by an employer, the question of an income tax claim by the employee in respect of those expenses does not arise.
As regards the reimbursement of expenses based on an acceptable flat rate allowance the employer must retain a record of all of the following:- the name and address of the employee
As regards the reimbursement of actual expenses vouched by receipts, the employer must retain such receipts, together with details of the travel and subsistence.
The period of retention of records is 6 years after the end of the tax year to which the records refer.
If an employer has doubts about the adequacy of records maintained, the local Revenue office can be consulted.
Civil Service motoring and bicycle rates
Cars (rate per kilometre)
Motor travel rates - from 1 April 2017
|Band||Distance||Engine capacity up to 1200cc||Engine capacity 1201cc - 1500cc||Engine capacity 1501cc and over|
|Band 1||0 - 1,500 km||41.80 cent||43.40 cent||51.82 cent|
|Band 2||1,501 - 5,500 km||72.64 cent||79.18 cent||90.63 cent|
|Band 3||5,501 - 25,000 km||31.78 cent||31.79 cent||39.22 cent|
|Band 4||25,001 km and over||20.56 cent||23.85 cent||25.87 cent|
The kilometres accumulated by an employee between 1 January 2022 and 31 August 2022 will not be altered by the introduction of these new rates. Actual kilometres driven to date will, however, count towards total kilometres for the year.
Mileage claims made in respect of journeys carried out in electric vehicles should use the rates applicable to engine capacity 1201cc-1500cc. Please see the above table.
|Engine Capacity:||Distance||Rate per Kilometre|
|Up to 150cc||Up to 6,437 km||14.48 cent|
|Up to 150cc||6,438 km and over||9.37 cent|
|151cc to 250 cc||Up to 6,437 km||20.10 cent|
|151cc to 250 cc||6,438 km and over||13.31 cent|
|251 cc to 600 cc||Up to 6,437 km||23.72 cent|
|251 cc to 600 cc||6,438 km and over||15.29 cent|
|601cc and over||Up to 6,437 km||28.59 cent|
|601cc and over||6,438 km and over||17.60 cent|
|Bicycle||Rate per Km||8 cent|
Rates for absences within the State
Domestic overnight subsistence rates (from 1 April 2017)
The period of subsistence at any one location is limited to six months.
Overnight allowance covers an overnight absence of up to 24 hours. This must be at least 100km from the employee's home and their normal place of work.
Normal Rate is for absences up to 14 nights.
Reduced Rate covers the next 14 nights.
Detention Rate covers each of the next 28 nights.
For assignments over 56 nights, you must make an application to Revenue to confirm subsistence is still available.
The assignment must be outside eight kilometres of the employee's home or normal place of work.
You can only claim both a day and overnight allowance if you work five hours or more the next day.
|Ten hours or more||€39.08|
Short term absence - These rates can be used for a temporary absence of up to six months where your employee is working abroad.
Subsistence rates for short term absences
|Period of assignment abroad||% of subsistence rate|
|Second and third month||75%|
|Fourth, fifth and sixth month||50%|
Long term absence
A long term absence will be more than six months.
For the first month of the absence you can allow subsistence for the overnight rate. This is to facilitate the employee to find self catering accommodation.
For the remainder of the absence you can allow subsistence costs and a portion of the ten hour day rate. The subsistence cost can cover the cost of reasonable accommodation. You can allow 50% of the day rate (ten hours) for the location.
If you repay your employee the expenses of travelling to and from their normal place of work, they must pay tax on this payment.
They must also pay tax on journeys to work in 'on call' situations.
Your employee may need to work outside their normal working hours to deal with emergencies which require their immediate attention. You may repay these travel expenses tax free. This can include the cost of taxis, or mileage expenses, using Civil Service rates.
You may repay expenses for a maximum of 60 such emergencies per year.
An emergency does not include:
Site-based employees do not have a fixed base and, in the course of their employment, perform their work duties at different locations. These duties generally last for periods longer than one day.
You can pay your employees expenses of travel and subsistence, not exceeding the approved rate (currently €181.60 per week), except where either:
In order to qualify for these expenses the employee must be working at a site 32km (20 miles) or more from your base.
Eating on site
You may pay an ‘eating on site’ allowance, tax free, to site-based employees in some sectors of the economy if:
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