trip gain

Keep-the-Change Travel Reimbursement

What is Keep-the-Change Travel Reimbursement?

Keep-the-change travel reimbursement is a policy where employees receive a set reimbursement amount for their travel expenses, often rounded up to the nearest dollar or a specific amount. This system is used by companies to streamline the reimbursement process, making it simpler and faster for both employees and employers. The employee can keep any extra funds if their travel expenses come in lower than the allocated amount, without needing to return the difference or justify every small expense.

This approach reduces administrative burdens by eliminating the need to track each individual expense in minute detail. Instead of requiring employees to submit receipts for every meal or transport fee, the company sets a standard reimbursement amount that is typically based on average or estimated travel costs. If the actual costs are lower, the employee benefits from the "keep the change" approach.

For businesses, this method can help control costs while still maintaining employee satisfaction by offering them flexibility. It also provides an incentive for employees to manage their travel expenses efficiently, as any leftover funds from the reimbursement can be kept as a personal benefit.

Examples of Keep-the-Change Travel Reimbursement in Corporate Travel and Expense
1.
A company sets a per diem for meals at $50 per day for a business trip. If the employee only spends $45, they can keep the remaining $5.
2.
A travel policy offers a flat reimbursement rate of $200 for transportation costs. If the employee spends only $180 on transportation, they get to keep the $20 difference.
3.
An employee is given a $100 travel allowance for incidentals but only spends $85 on minor expenses. They keep the $15 difference as a benefit.
Frequently Asked Questions About Keep-the-Change Travel Reimbursement
1.
How does keep-the-change travel reimbursement work?
Employees are given a set reimbursement amount for their travel expenses. If their expenses are lower, they get to keep the difference, simplifying the reimbursement process.
2.
What are the benefits of keep-the-change travel reimbursement for employees?
Employees benefit by keeping the leftover funds from their allocated reimbursement, offering them flexibility and an incentive to manage their travel costs efficiently.
3.
How does keep-the-change reimbursement differ from per diem allowances?
Keep-the-change reimbursement provides a fixed amount for expenses, whereas per diem allowances usually specify daily limits and may require employees to submit receipts for actual expenses.
4.
Is keep-the-change travel reimbursement suitable for all types of travel?
While it is effective for standard travel expenses like meals and transportation, it may not be appropriate for large or irregular expenses like flights or hotel bookings, which may need more detailed tracking.
5.
Can employees be penalized for spending less than their travel reimbursement?
No, employees cannot be penalized for spending less. They can keep the difference as a benefit, which is the key appeal of the keep-the-change reimbursement system.