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CRA Review of Corporate Travel Expenses

The Canada Revenue Agency (the “ CRA ”) conducts regular reviews of corporate tax returns. As part of a new group project, the CRA is focusing on corporate travel expenses. What does this mean if you claimed travel expenses on your corporate tax returns?

You may be selected for a review to ensure that you have the correct books and records in order to deduct the travel expenses you have claimed. Once selected, the CRA will ask for documentation to support your deductions and explanations how they relate to your business.

Travel Expenses

A taxpayer can deduct travel expenses incurred to earn business and professional income. In other words, you can deduct reasonable travel expenses only for travel that relates to your business. Examples of acceptable travel expenses include public transportation fares, hotel accommodations, and meals.

When claiming travel expenses, it is important that you keep all of the related records. While the CRA may accept bank or credit card statements as proof, they normally require the primary receipt to give you the full amount of your deduction claimed. Best practice is to also keep a travel log so that you are able to explain how the travel furthers your business. Without a log, the CRA will be skeptical that your travel was related to your business.

What is the CRA Review Process?

If you have been selected for a review, you will get a letter or telephone call from the CRA. The CRA will ask for information, receipts, or documents to support a claim or deduction you made on your tax return.

If you are registered for online mail, the CRA will send you an email notifying you of a letter on your CRA account. You should promptly go to My Account where you can review the letter and begin working on your response.

It is important that you respond and send all the information requested as soon as possible. This will help the CRA review your file quickly. Keep in mind also that these reviews are not full tax audits .

The type of documentation the CRA may request to support travel expenses include:

• a detailed list of the transactions (or the general ledger entries) related to the expenses;
• an explanation of the reason for the travel;
• a copy of the invoices or receipts for the ten largest transactions included in travel expenses for each tax year; and
• a copy of any travel logs.

If the CRA does not receive the supporting documentation, they will disallow the travel deductions.

Normally the letter provides a 30 day deadline for a response. These letters are typically signed by a specific CRA officer, so if you require an extension, you will need to contact that officer to request more time. If you cannot reach the officer, you can always contact the CRA general business line.

If you are being reviewed for your travel expenses, or have questions about whether you are eligible to claim travel expenses, give R&A Tax Law a call today !  We can help you navigate this complicated review process. We are here to help!

**Disclaimer

This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.

Related posts:

• Should I Keep a Logbook for my Expenses?
• Home Office Expenses and COVID-19
• What are Reasonable Business Expenses?
• Motor Vehicle Expenses
• The Tax Implications of Running a Personal Services Business

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How to write off business travel and not trigger red flags at Canada Revenue Agency

If you run into an audit on a questionable expense, it will cost you enough that you’re unlikely to come out ahead

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In his 23 years as an accountant, Frank Jasek has been asked by clients “more than once” whether they can write off gambling expenses in Las Vegas (no, even if they are with a client). And ditto for escort services, even though they’re legal in the state of Nevada.

Business travel is one expense category that attracts a second look from Canada Revenue Agency (CRA), mainly because there’s potential for personal benefit, says Jasek, a partner with tax and accounting firm Prapavessis Jasek in Toronto.

How to write off business travel and not trigger red flags at Canada Revenue Agency Back to video

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As a result, he says, in recent years, the CRA has homed in closer on those writing off business travel expenses.

Red flags for the tax man. The CRA uses sophisticated algorithms to suss out expenses that seem out of whack. “It’s all about percentages,” says Jasek. “When we look at clients’ expense reports, if we see more than 10 per cent allocated to travel, we ask about it. That’s a lot.”

For big businesses, that percentage should be even lower. “They would never even get close to 10 per cent,” he says.

Jasek’s advice: look at your expense categories as a whole, and try to ensure you’re not taking an overly aggressive approach to all of them. “If you’re paying your kids, deducting a home office and entertainment expenses through the year and deducting high business travel expenses, maybe you should dial it back a bit,” he says. “There comes a time when you’re likely to catch the attention of the CRA.”

When we look at clients’ expense reports, if we see more than 10 per cent allocated to travel, we ask about it

Even if you’re able to justify those expenses, Jasek adds, there’s still an accounting cost associated with an audit and you’re unlikely to come out ahead in the end.

Bringing a spouse can be tricky. “The rule of thumb for the CRA is to say, ‘No, no, no,’ to a spouse coming along on a business trip,” says Jasek. But there are certainly good justifications. “If you’re meeting with a client and he is bringing his wife, it may not be good for business to go without yours,” he says.

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If your spouse is there to help staff the trade show booth, that’s a writeoff. For most entrepreneurs, “the business is a family affair and the spouse is an integral part of it,” says Jasek. “If you want to be conservative, you could claim 100 per cent of the expense for you and 80 per cent for your spouse.”

If your husband’s job is to decorate the trade show booth, however, that’s probably not a good enough reason to fly him to Hawaii. And, says Jasek, “we always say no to writing off expenses for kids.”

In praise of the bizcation. Combining a business trip with pleasure can be an excellent way to get some R&R and lower your tax bill, too. Your plane, train or mileage costs, hotel expenses and car rentals are fully deductible.

Go out with a client for dinner or a show, and you can write off 50 per cent of the associated entertainment expenses.

The caveat: The primary purpose of your trip must be business and the more planning you’ve done, in terms of setting up meetings or even coming up with a list of potential clients to cold call, the better. If you’re flying to Key West to buy office property, it’s not enough to grab a flyer from a real estate office and then go to the beach, says Jasek.

One conference, two conference, three conference, more? The rule on conferences: officially, you can write off two per year if “the business purpose of the conference makes sense,” says Jasek. “A Star Trek conference in Las Vegas is not a writeoff even if you’re a computer nerd.”

But the two-conference rule is flexible. First of all, more than one person from your company can attend. And if your business takes in several different segments, you can go to two conferences for each. “I could potentially go to two accounting conferences and two tax conferences,” explains Jasek, “because my business takes in both.”

Another factor: the conference must take place in the jurisdiction covered by your trade or profession, or where you do business. “I couldn’t go to a tax conference in Europe,” says Jasek. “That has nothing to do with my work.”

In the end, says Jasek, the overarching factor in whether the CRA considers travel deductible as a business expense is whether there’s a reasonable expectation it will help your business.

“These things are often decided on a case-by-case basis,” he says. “If the CRA decides to challenge you, they will take the left side and you’ll take the right side. Then it’s just a question of whether the facts support it.”

Camilla Cornell is a business writer and intrepid traveller, who nonetheless appreciates a little comfort when away from home.

[email protected]

Twitter.com/camillacornell

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How to Calculate Business Travel Expenses

Traveling for business can be both exciting and costly. It requires careful planning to ensure that all business travel expenses are properly accounted for and tracked. Knowing how to calculate business travel expenses can help save both time and money, which for a small business owner, is extremely valuable.

Business travel expenses can be tricky, but understanding Canada's rules and regulations for business travel expenses can help you stay on the right side of the law. In this article, we'll explore how to calculate business travel expenses in Canada, including an overview of the rules, regulations and guidelines that business owners need to follow.

In order to claim business travel expenses in Canada, business owners are required to properly document their business activities related to the trip in question. This includes providing receipts and other forms of proof that validate the purpose of the business activity and any associated costs like travel and accommodations. A clear paper trail needs to be established in order for business owners to receive reimbursement or tax deductions on business travel expenses.

When calculating business travel expenses, it’s important to differentiate between personal versus business-related activities. Any costs that are related to a personal activity should not be claimed as a business expense. For example, let’s say that you’re attending a conference in another city; if you attend a tourist attraction while on the trip, then this would be deemed as a personal expense and should not be claimed as part of your business expenses. The same applies for meals; any meals consumed during non-working hours or outside of your normal working hours would not qualify as a valid business expense either.

Before claiming any type of business-related expense, make sure that it meets two criteria; firstly, is it required for your specific line of work? And secondly, does it directly relate to generating income or profits for your company? If you can answer yes to both questions then chances are you have a valid business expense.

When it comes time for filing taxes, all valid business-related costs must be properly documented with accompanying receipts or other forms of proof before they can be claimed as an expense against taxable income or used as part of tax calculations. Make sure you keep all relevant documentation such as tickets/boarding passes, accommodation invoices and receipts from restaurants/bars etc., so that you have all the necessary information when submitting your tax return at the end of each fiscal year.

It’s also important to note that there are limits placed on certain types of claims depending on whether they are domestic (within Canada) or international (outside of Canada). Generally speaking, both domestic and international trips will see meal claims capped at $51 per day while hotel stays should never exceed $200 per night unless absolutely necessary due to contracts or safety issues etc. Additionally, airline tickets cannot exceed Economy class seating unless specified by contract agreements with customers or suppliers which require higher class seating arrangements due to security clearance requirements etc.. Furthermore, some provinces may impose additional taxes on lodging/accommodations depending on location – make sure that these taxes have been added into any claims made before submitting them for reimbursement or deduction against taxable income!

Overall, calculating business travel expenses in Canada is an important part of running a successful business operation but ensuring that all relevant rules and regulations are followed is also equally as important! Before making any claims ensure you understand exactly what type of costs can be both reimbursed/deducted from taxable income according to Canadian law – this will help you stay compliant with legal requirements while also ensuring maximum returns from legitimate expenditure!

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Reimbursements and allowances for remote workers’ travel expenses

This content was originally published in the Canadian Tax Foundations newsletter: Canadian Tax Focus. Republished with permission.

Travel between an employee’s residence and a regular place of employment (RPE) has long been considered by the Canada Revenue Agency (CRA) to be personal travel and not part of the employee’s office or employment duties; therefore, any reimbursement or allowance relating to this travel is a taxable benefit. Conversely, where travel relating to a location other than an RPE is involved, such payments are non-taxable.

But what is an RPE in this era of remote work? A recent technical interpretation provides that a location used for a one-time, multi-day training session for remote workers is not an RPE for those workers (CRA document no. 2022-0936671I7, June 30, 2022); the CRA therefore concludes that the reimbursements and allowances for travelling there are generally non-taxable. However, the CRA notes one exception: allowances for meals (and presumably lodging) are non-taxable only if the rules for a special work site apply.

The CRA generally comments that whether a location is an RPE is a question of fact. CRA document no. 2012-0432671E5 (August 13, 2012) observes that a location could be an RPE even if the employee works there only once or twice a month, but the location might not be an RPE if the employee works there only once or for a few days during the year. In contrast, CRA document no. 2016-0643631E5 (August 17, 2020) declines to offer an opinion on a situation where an employee works at two different locations on alternating weeks. The 2022 technical interpretation takes more definitive positions, which are favourable to the employee.

The 2022 technical interpretation concerns an employer’s plans to hire new employees who reside far from the employer’s offices. The employees may work from home or designate one of the employer’s offices as their place of work, without requiring regular attendance or reserving an onsite workspace. The employer will also provide the necessary equipment for remote work. In addition, the employees will be required to attend a single three-day event during their employment contract for training and team-building activities. For employees who are required to attend, the employer will reimburse reasonable accommodation and transportation costs (bus, train) or provide a per-kilometre motor vehicle allowance. A meal allowance will also be provided.

The CRA concludes that the work location designated in the employment contract is not considered to be an RPE for the new employees. Therefore, reimbursements of travel expenses do not need to be included in their income under paragraph 6(1)(a). Also, reasonable per-kilometre allowances received by employees for the use of their motor vehicle for travel in the course of performing their duties will not be included in their income by virtue of subparagraph 6(1)(b)(vii.1).

The CRA notes that the situation for meal allowances is different. The exemption in subparagraph 6(1)(b)(vii) for reasonable allowances for travel expenses that are not for the use of a motor vehicle requires that the employee be travelling away from the municipality where the employer’s establishment is located. Since the employee’s home is not such an establishment, this condition is not satisfied. However, the CRA notes that the meal allowance could be non-taxable by virtue of subsection 6(6)—special work site. The CRA agrees that the work to be performed (that is, training and team-building activities) is considered temporary in nature and required as part of the employee’s duties. As such, the amounts paid for travel will not be required to be included in their income if all other conditions of the subsection are met. In particular, the employee must be away from home or at the special work site for at least 36 hours and cannot be expected to return home daily from the special work site because of the distance involved.

Similar reasoning would presumably apply to allowances for lodging expenses, although this issue was not discussed.

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Managing business travel expenses

What exactly are business travel expenses, which business travel expenses can employees claim.

• The direct costs of travel (airfare, train tickets, hotel stay, etc)
• Subsistence expenditure (food and drink consumed during travel)
• Any other costs associated with the journey, such as entertainment.

What is not a legitimate travel expense

• Commuting to and from your regular office
• Any travel taken for private reasons.

How to manage the travel & expense process

1. decide on the employee payment method.

• Ask employees to pay them upfront using their personal bank/credit card or with cash  and then have them submit expense claims.
• Pay expenses directly from a company bank account or company card.

1. The company credit/spending card

2. pay with personal cards and submit expense claims, 2. set out a clear process for expense submission & reimbursement.

• Pre-trip expense projection – Ask employees to complete a budget projection prior to their trip, this will force them to consider their spending.
• Receipt and invoice types – Be sure to state in what format you expect proof of payment to be provided (e.g. tax invoice in PDF/ physical receipt)
• Expense claim submission timeline – Ensure that all expense claims are made within 5 working days after the business trip.
• Expense reimbursement period – The company commits to reimburse staff within 15-30 days of the expense claim, during which time the company can query employees about expenses.

3. Communicate the expense policy

• Company-wide emails every quarter – Send an email with the expense policy every quarter, this may not be necessary if you are a small team.
• Talk about it at all-hands meetings –Your employees are important and they save the company money. Open the floor to them at the next company meeting and ask them to give (anonymous) examples of ) of good and bad expense claims.
• Post it on your company intranet – Make sure it is a living document that’s easily accessible. Link it to a Google doc or whatever tool you use. This means updates don’t require you to ask employees to delete or disregard previous versions.

How to calculate and track business travel expenses like a pro

1. record everything and tag each expense.

• By trip type (existing client, sales, corporate event)
• By department
• By expense type

2. Calculate every trip

• Travel costs – plane, train, car rental, this includes fuel costs Accommodation – Hotel, Airbnb, or wherever you stayed
• Food & drink
• Entertainment – either for clients or if permitted in policy
• Wi-Fi connections, or anything else you needed to do business on the road.

3. Categorize your spending

Predict your travel expenses, how to reduce travel expenses for small businesses, 1. do you have to stay the night, 2. get the point(s), 3. cut the taxis, 4. get corporate rates, 5. get the per diem right, 6. recover the tax.

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Business Travel Expenses – A few things to care about!

Fatima aslam.

• September 26, 2019

Home » Insights » Business Travel Expenses – A few things to care about!

In this post, we are going to comment on travel expenses in general without covering each and every possible scenario. Should you need tax advice, please contact a reputable corporate tax accountant in Canada and discuss the particular situation.

What type of travel expenses can be deductible?

Generally speaking below expenses are eligible for deductions:

• Meals & Entertainment
• Hotel accommodations
• Air travel tickets and train tickets
• Car rentals and Taxi
• Convention expenses
• Motor Vehicle usage

Depending on the specific situation, there might be other deductions available too.

What Meals and Entertainment expenses are deductible?

Generally, you can claim only up to 50% of meal and entertainment expenses. The purpose of these meal meetings should be primarily business for them to be deductible as business expenses.

When hotel accommodation can be deducted?

Hotel accommodations are usually deductible when there is an overnight stay away from your town, and it is for business purposes. You must differentiate between local business travel from out-of-town business travel other than considering the need and reasonableness of travel.

Bizcation – Can a vacation be combined with Business Trip to write-off travel expenses?

If you are travelling primarily for business and want to have a vacation, you might be eligible to deduct airfare & hotel stay. You might also be eligible to deduct meals and entertainment expenses if you accompany your client. Expenses incurred on personal entertainment and travelling around are not deductible.

Cost of Conventions

If attending conventions related to your profession or business, you can deduct these costs but these costs are limited to two conventions per year. While on these conventions you may be eligible to deduct some meals and entertainment expenses subject to a 50% deduction limit.

If the spouse travel expenses can be deducted as Travel Expenses?

If the business requires and requests that your spouse travels with you for business purposes, the business can deduct those expenses. If it is not required but paid by the business, it’s a taxable benefit from business to employee.

If you are taking your spouse on a business trip and she will be involved in the business activities which are reasonable and necessary, these are deductible. However, if your spouse is not part of your business meetings, conventions, or any other business activity AVOID claiming such a deduction.

If Kids travelling expenses can be deducted?

You should avoid any kids travelling expenses to be written-off for business purposes. If a business is paying you a vacation for kids, its a taxable benefit at your hand.

Can I deduct my personal travel as a business travel and get away with it?

You may get away with it for a while but it is very likely that you are going to catch the attention of CRA, sooner or later. Avoid it in all cases! Even if you are able to manufacture a business reason for such an expense consider the consequences of making false statements and the legal and accounting costs involved in the process.

Generally, you should claim the expenses which are for business purposes and if they are mixed with personal expenses, allocate a percentage to business.

If you are an incorporated business, consult a corporate tax accountant in Canada and if you are an unincorporated business consult professional tax preparation services . When in doubt, a lot of resources are available in the form of guides from CRA on the internet or simply give them a call.

Alternatively, you can contact us at Maroof HS CPA Professional Corporation . We provide both individual tax preparation services and corporate tax services in Canada .

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Travel Expenses: A Quick Guide

Nerissa McNaughton

Traveling for work can be fun, but afterward comes the hard work of sorting out the receipts and claiming the expenses. Here’s a quick guide based on Canada Revenue Agency’s (CRA) requirements on what you can and cannot claim. This information is handy for employees but is also something employers must know. If you run a small business and require your staff to travel for conferences, sales, training, or events and you do not provide a travel allowance or pre-pay/reimburse their expenses, you are required to provide and sign Form T2200, which your employee needs when they make a claim at tax time.

The Basics of Travel Expenses

Travel expenses include food, accommodation, and transportation. Other expenses not directly related to CRA’s guides may apply, such as conference registration fees or the cost of treating clients to entertainment.

Travel Expense Conditions

To claim travel expenses, you must meet all of CRA’s conditions:

• Your place of employment requires you to work away from the base of operations.
• Your contract of employment states that you must pay your own expenses out of pocket (if not, it is up to the company to claim the travel expenses on your behalf).
• You do not receive a non-taxable travel allowance.

The Necessary Paperwork

The records you submit to CRA should include a signed copy of the Declaration of Conditions of Employment (CRA’s Form T2200 ). If your claim is for transportation expenses, you will also require Form T777 .

Get in the habit of keeping your receipts in a secure location as you travel (have an envelope in your laptop case or briefcase) and also get into the habit of recording details of the expense on the receipts. For example, if you take clients to dinner, note the name of the company you were treating and the names of the guests. If you have a gas receipt, note the name of the company or conference you were traveling for. It is much easier to have these details on hand than to try and remember them weeks later as you make your claim. Even if those details are not needed at tax time, you may need them during an audit.

Be Aware of What you Can Claim

Not every travel expense can be claimed or claimed in full. For example, you must be away from the base of operations’ town or metropolitan area for 12 consecutive hours to claim food and beverage expenses. Food/beverage is deducted at 50 percent of the lesser of what you paid or what is reasonable under the given circumstances. If your meal was part of the fare for transportation (for example, a private bus and meals are provided), you cannot claim the meal separately. Food/beverage is claimed on Form T777 .

Don’t Take Advantage

Whether you are traveling for an employer or are self-employed, remember that travel expenses are not a windfall. Avoid the most expensive restaurants and don’t overindulge in wine on the company’s dime. Skip the valet parking and first-class tickets unless otherwise approved. These things do not go unnoticed by your employer, or by the auditors at CRA.

To learn more about travel expenses and how to claim them, visit AF Accounting .

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Track mileage automatically

Travel expenses for employees, in this article, the cra rules on travel expenses, rates for travel expenses, are travelling expense reimbursements taxable.

Any charges an employee incurs when travelling for work are considered travel expenses. Traveling to a client's site, going to a conference, or stopping by a separate office of the business are all examples of this. It excludes any non-business-related personal expenses.

The charges for the additional time, for instance, wouldn't be regarded as a legitimate travel expense for reimbursement reasons if the employee extends the trip by a few extra days.

It is often the policy of a Company to reimburse employees for reasonable and necessary costs incurred while on authorised work-related travel.

Example of work-related travel expenses include a) Airplane tickets b) Baggage fees c) Train tickets d)  Rental cars e) Hotel rooms and accommodations f) Business meals, food and beverages g) Road tolls  h) Parking fees.

What are travel expenses? If you meet all of the requirements below, you may write off your trip expenses:

• You are normally required to work elsewhere or in a different location from your employer's  place of business.
• Your work contract required you to cover your own travel costs.
• You didn't get a reimbursement for your travel costs that wasn't taxable. In general, if an  allowance is for a fair amount, it is not taxable.  
• You must maintain a copy of Form T2200, Declaration of Terms of Employment, which has been filled  out and signed by your employer, with your records.  

On the "Other expenses" line of Form T777, Statement of Employment Costs, enter your claim for deductible transportation costs (including those incurred by bus, train, or other mode of  transportation).

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The 2024  current mileage reimbursement rate is 70 cents per kilometre for the first 5,000km driven and 64 cents per kilometre after that.

Any incidental expenses spent while using your car (such as charges for jump starts, tyre  changes, etc.) are reimbursable as long as they are fair under the circumstances. You must spend a minimum of twelve straight hours away from your regular place of employment in order to be eligible for deductions on food and drink while travelling.

The most you can deduct from a business dinner is 50% of the lower of the two amounts: the actual cost and the amount that would have been appropriate under the circumstances.

A receipt or other proof of payment must be shown in order to receive reimbursement for tolls and parking fees incurred during a business trip. Fuel costs paid by employees driving rental cars will also be refunded with proper documentation, such as a receipt or payment confirmation.

According to the CRA, travel reimbursements are not taxable and can be deducted from the employee’s income if all of the following requirements are satisfied:

• The employee travels away from the office.
• The allowance is reasonable. The CRA generally considers a value of up to $23 for the meal portion of the travel allowance to be reasonable.
• You are the primary beneficiary of the allowance.
• The allowance is not an additional form of remuneration.

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2024 CRA Mileage Rate Explained – How To Claim CRA-Approved Mileage Deductions in Canada

Whether you are a self-employed or salaried worker in Canada, using your personal vehicles for work means that any car-related expenses incurred when conducting business are tax-deductible. The CRA allows you to claim these deductions if you have accurate records that show how you used your personal vehicle for business purposes.

Today, we will explain the CRA’s regulations for both self-employed and salaried workers in detail, as well as how TripLog’s mileage/kilometer tracking solutions can help you save thousands every tax season.

CRA Rules: Mileage/Kilometer Tracking For Self-Employed

Self-employed individuals can find the general guidelines for motor vehicle expense deductions in Canada here . It’s worth noting that business-related travel expenses are only deductible if the vehicle is used for both personal and business purposes.

Related: Are You an Independent Contractor or an Employee?

Below is a synopsis of all the deductible vehicle expenses that you should monitor and record in order to be eligible for deductions come tax time.

Total Operating Expenses

Individuals can claim any expenses incurred for operating their vehicles for business purposes to the CRA. These expenses can include fuel costs, maintenance, repairs, licenses, insurance, and certain leasing costs (additional details here ).

As stated above, you will need accurate records to prove that you incurred these costs when conducting business using your personal vehicle. Using pen-and-paper mileage logs can be time-consuming and inaccurate, costing you thousands. Try TripLog free for 15 days and see your savings immediately with our intuitive in-app expense reports !

Capital Cost Allowance

Capital cost allowance (CCA) refers to either the fair market value or the cost of the vehicle used for business purposes; whichever is lower if it’s a passenger vehicle that fits no more than eight passengers, including the driver, and is valued under $20,000.

For any passenger vehicle costing more than $20,00 and/or motor vehicles such as vans and pickup trucks, you can find the details here .

You can deduct up to $250 every 30 days on any interest you pay on loans used to buy your vehicle.

Personal vs. Business Segment     

As mentioned above, the portion of your total expenses, capital cost, and interest that you can claim will be the proportion of the total kilometers driven for business vs. personal use of the passenger vehicle.

For example, let’s say you accrued $8000 in business expenses when using your personal vehicle, and you drove for 32,000 kilometers, with 24,000 representing business use. Using the below equation, we find that the deductible amount of $6,000.

(24,000 ÷ 32,000) × $8,000 = $6,000

CRA Rules: Mileage/Kilometer Tracking For Salaried Workers

Salaried employee’s allowable motor vehicle expenses.

As a salaried employee, you may be able to claim certain employment expenses on your income taxes and receive a return if you had to pay for those expenses under the contract of your employment. This employment contract does not have to be in writing, but you and your employer must agree to the terms and understand what is expected.

Related: 3 Ways SMBs Can Save Money (And 3 Ways They Lose Money)

The types of deductible and allowable expenses are very similar to those for self-employed individuals . As previously mentioned, a portion of your total expenses incurred when conducting business using your personal vehicle that you may claim will be proportional to the total kilometers driven for business vs. personal use of the passenger vehicle.

Company Reimbursement Using AAR (Automobile Allowance Rate)

As a salaried individual, your employer may reimburse you for any expenses incurred when using your personal car for work. When you do get your reimbursements, make sure they are included in your employment contract and follow the CRA automobile allowance (AKA mileage) rates for 2024 .

What Is the 2024 CRA Automobile Allowance (Mileage) Rate?

From the CRA’s official website , the 2024 automobile allowance rates are:

• $0.70 per kilometer for the first 5,000 kilometers driven
• $0.64 per kilometer driven after that

Keep in mind, if you’re driving in the Northwest Territories, Yukon, and Nunavut, there is an additional $0.04 per kilometer allowed for travel (starting at $0.74 per kilometer, then $0.68 after 5,000 kilometers driven).

Do You Need a CRA-Compliant Mileage/Kilometer Log?

Whether you’re self-employed or an employee, no matter what deductibles you’re eligible to claim back, you are required to keep and provide factual support to prove that the kilometers you listed were driven for business reasons. The CRA requires you to document your business kilometers in detail to qualify for motor vehicle deductions.

According to the CRA website , the best way to support the use of a vehicle is an accurate digital logbook of business travel maintained for the entire year showing each business trip, the destination, the reason for the trip, and the distance covered.

As mentioned above, to make a claim, you must keep a log containing both the total kilometers driven and the kilometers driven solely for business purposes. In addition, the deductible expenses must be reasonable and backed by receipts.

Furthermore, you must record the dates of the changes and the odometer readings for the corresponding transactions for any motor vehicle changes.

Manual Mileage/Kilometer Tracking

Although a pen-and-paper CRA log is a good way to keep all your records straight for the year, it can become a very tedious and time-consuming process that can bog you down. This is especially so if you’re a busy self-employed individual or a large company tracking your employee’s business kilometers. Manual kilometer tracking and monitoring through logbooks can get tiresome, be prone to errors , and is simply not scalable.

Related: How To Prevent Fraud In Business

Automatic Mileage/Kilometer Tracking

Automatic mileage/kilometer tracking is very popular thanks to recent advancements in technology, and the benefits over manual tracking are numerous. Most automated tracking solutions are smartphone apps like TripLog, often with cloud backup and web dashboard access.

Here are some of the top reasons to use an automatic mileage tracker instead of outdated manual methods:

Automatic Mileage/Kilometer Tracking App Benefits For Self-employed & Enterprise-scale Companies

Accuracy & cra compliance.

Bluetooth tracking, iBeacons , GPS, and other technologies have enabled fast and accurate tracking that a manual log cannot beat. Humans are prone to errors in tracking logs using logbooks and hoarding expense receipts, especially for small business owners, freelancers, and gig economy leaders.

Savings: Time & Money

Smartphone apps can get you so much more savings, whether through money or time. Simplified and automatic tracking saves you time, and accurate and complete CRA-compliant records of all your business kilometers ensure you maximize your tax deductions and savings.

Related: 3 Reasons Why Your Small Business Needs An Accountant

In addition, some advanced mileage/kilometer tracking apps have integrations with accounting software that can save you even more time. No need to keep separate records for your car and your accounting software.

These integrations save time and money, as well as provide better communication between you and your accountant. TripLog, for instance, integrates with

Mileage Tracking App Benefits Just For Enterprise-scale Companies

Transparency – inflated employee estimates.

Many smartphone mileage/kilometer tracking apps have enterprise solutions for mileage reimbursement purposes. These apps take the guesswork and verification process out and bring more transparency to the process through automatic tracking technologies and map-verified locations. This saves the company from potential fraud, leading to more savings in terms of time and money.

Schedule and Time Management

Dispatching a team on the road and scheduling pickup/deliveries for many businesses can be a logistical and scheduling nightmare. But automated tracking with smartphones and monitoring on the web can save the day and vastly improve the schedule and time management capabilities of small to medium organizations .

How Can TripLog Help?

TripLog is a smartphone app with a powerful web dashboard designed to provide company mileage tracking to businesses and their mobile employees. Our solution offers CRA-compliant tax deductions, travel and expense management, and replaces time-consuming manual solutions.

Related: Why TripLog Is The Best Mileage Tracker App (2024 Comparison)

Our integrations to QuickBooks , Xero , and ADP make mileage/kilometer tracking and claiming expenses from the CRA at tax time a breeze.

Whether you are a self-employed or a salaried individual, and whether you do it manually or by using an automated system, keeping track of all your kilometers is a must if you want to claim back some of your business-related expenses from the CRA. Get started with TripLog today with a complimentary web demo , or visit our pricing page to learn more !

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Chicago travel company AmTrav bought by tech firm TravelPerk

Amtrav is geared toward small and medium-sized u.s. companies, allowing them to book trips, manage payments and expenses, set travel policies and more..

AmTrav CEO Jeff Klee

Chicago-based corporate travel company AmTrav has been acquired by TravelPerk, an online business travel platform based in Barcelona, the companies announced on Tuesday.

AmTrav’s platform is geared toward small and medium-sized U.S. companies, allowing them to book trips, manage payments and expenses, set travel policies and more. Financial terms of the deal were not disclosed.

The company has 130 employees across Los Angeles and its West Loop office at 1021 W. Adams St. AmTrav will continue to operate independently with no changes to its leadership, according to the company.

TravelPerk’s acquisition of AmTrav doubles its U.S. revenue and gives it more locations in the U.S., in addition to existing locations in Chicago, Boston and Miami.

AmTrav’s “decades-long track record of success in the U.S. will supercharge our growth in the U.S. and around the world,” said TravelPerk CEO Avi Meir, who co-founded the company in 2015.

AmTrav was founded by CEO Jeff Klee and President Craig Fichtelberg. The pair launched a travel business in 1989 from their dorm room at the University of Michigan, in an attempt to “get a free spring break trip,” according to the company’s website. In 1991, they opened the travel call center 1-800-CHEAP-AIR, then launched CheapAir.com in 2001. In 2011, they started AmTrav for business travelers.

Klee said in a statement that “AmTrav’s customers will benefit from TravelPerk’s global reach, scale and culture of innovation.”

In January, Japanese firm Softbank led $70 million of a $104 million investment in TravelPerk, valuing the company at $1.4 billion. Existing investors, including Kinnevik and Felix Capital, were also part of the deal.

TravelPerk also announced Tuesday a new credit facility, a type of ongoing loan, of up to $135 million led by asset managers Blackstone Credit & Insurance and Blue Owl Credit that helped fund its acquisition of AmTrav.

TravelPerk said its purchase of AmTrav reflects the rebound of business travel after it ground to a halt during the COVID-19 pandemic .

But the U.S. Travel Association said in a forecast, released in January, that slowing economic growth would dampen domestic business travel. The sector has not completely recovered to pre-pandemic levels. The industry group projected that U.S. business travel this year would reach 95% of 2019 levels, up from 89% in 2023.

In a separate January report, the U.S. Travel Association said the U.S. ranked at No. 17 “out of 18 top travel markets, due to decades of underinvestment and a lack of focus and coordination from federal policymakers.”

“While we inch back to pre-pandemic travel numbers, other countries are actively advancing strategies to gain international visitors and are now ahead of the United States in the race to win back the global travel market,” Geoff Freeman, U.S. Travel Association President and CEO, said in the report.

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New travel, pcard and expense - office hours.

[email protected] | June 12, 2024

Mark your calendars and join us for monthly Travel, PCard and Expense Office Hours!  Starting July 9, 2024.

This is a great opportunity to stay connected to current news, updates and ongoing processing support.

WHEN?   Join us on the 2nd Tuesday of every month from 10-11:30 a.m.  

HOW TO JOIN?     Use this link to join the office hours in Microsoft Teams    ( <--- NEW LINK!!)

WHAT SHOULD I EXPECT FROM OFFICE HOURS? 

• News and Updates (system, policy or suppliers)
• Demonstrations of Workday Processes
• Chat with the Travel, PCard and Expense Team to ask questions or get guidance with policy/systems issues

WHO SHOULD JOIN OFFICE HOURS?

• Anyone who travels or is responsible for arranging travel on behalf of an employee or guest
• Anyone who is responsible for generating or approving Spend Authorizations and Expense Reports in Workday
• Cardholders, Card Managers, Card Users and individuals that support the transaction expense process
• Anyone who is responsible for generating or approving Miscellaneous Payments in Workday

WHERE DO I GET ADDITIONAL GUIDANCE OUTSIDE OF OFFICE HOURS?

• Travel Website     
• PCard Website
• Expense Website    
• Administrative Resource Center (ARC) (link is external)
• [email protected]  or 614.292.9290 (Option 1)
• [email protected]  or 614.292.9290 (Option 2)
• [email protected] or 614.292.9290 (Option 3)

CRA treatment of pastor highlights problems with the agency

It was May 2, 2024, that the Tax Court of Canada handed down its verdict in the case of Schroeder v. The King (2024 TCC 56). This is the story of Rev. Peter T. Schroeder, who is a certified and ordained clergyman. He was ordained in the North American Baptist Denomination in 1983, and resigned from his position in April, 2020, as pastor of a church in Kelowna, B.C., after serving that congregation for more than 40 years.

Then Rev. Schroeder had an opportunity to take on the role of chaplain to the RCMP members and personnel in the Kelowna area. He became chaplain to more than 300 RCMP employees. A letter from the RCMP district commander confirmed that Rev. Schroeder has provided critical wellness support “during those times our members experience traumatic incidents.” When distressing and disastrous events occurred, he’d show up on the scene to offer support.

Rev. Schroeder’s compensation for his chaplaincy services was paid by the Kelowna Trinity Baptist Church Legacy Foundation. Now, clergy such as Rev. Schroeder are generally allowed to claim a “clergy residence deduction” to help reduce their tax burden. The agreement that Rev. Schroeder signed with the foundation was not titled an “employment agreement.” Rather, it was an “agency agreement.”

The clergy residence deduction under our tax law is available when the individual has earned income from an “office or employment.” The Canada Revenue Agency (CRA) took the position that Rev. Schroeder’s income was not from an “office or employment” and disallowed his $22,000 clergy residence deduction for 2021. The taxes at stake amounted to $5,645. CRA wasn’t giving in. The only option Rev. Schroeder had was to go to court, where he represented himself. The court allowed his deduction.

Without getting into the criteria the courts examine to determine whether someone is an employee or self-employed – regardless of the title on the agreement – I will simply say that there are many court cases on this exact issue and the criteria is well-established.

When it comes to Rev. Schroeder’s plight, CRA’s legal counsel should have had a better grasp of the criteria, should have known that he was effectively an employee and should have dropped this case from the outset. But instead, the department dragged Rev. Schroeder through a stressful reassessment and litigation process for over two years, costing the government many thousands of dollars. For what? Taxes of $5,645. Shameful.

CRA problems

This government talks about taxing the rich and lowering taxes for “the middle class and those working hard to join it.” Rev. Schroeder is, by all accounts, not in the category of the “rich.” Did someone not send CRA the memo about focusing on the rich?

Perhaps the problem is that the government has increased the number of CRA employees by 47 per cent since 2015, when the Liberals came into power. These people need work to do. Is it any surprise, then, that honest taxpayers like Rev. Schroeder are unreasonably being targeted, and by employees who, apparently, don’t have enough truly meaningful work to do, and lack a good understanding of the tax law and related jurisprudence?

CRA would be much better off with fewer, highly knowledgeable employees, who can take a more targeted approach to tax audits than wasting money and time chasing small, honest taxpayers. It’s a process that is costing thousands of middle-class taxpayers millions of dollars to defend themselves against frivolous reassessments by the department.

I can add my own personal experience to the list. Like many Canadians, I regularly work from home and continually meet clients there on a regular basis. I did this even before the pandemic. I claimed home office expenses for 2019 and 2020 – all legitimate. The CRA audited my claim for these years. I have no problem with that. Until it became a problem.

The amount of detailed information that CRA required me to provide amounted to no less than 700 different documents, to support deductions which saved me about $4,000 in taxes. I very nearly gave up, telling myself it’s not worth it. Most would have given up providing information, and would have been denied deductions that they’re legitimately entitled to claim. There is no reasonable correlation between the tax dollars at stake and the lengths to which the CRA will require taxpayers to go, to be provided the deductions or benefits they are legitimately entitled to. That’s a big problem.

I agree with the thousands of tax professionals around the country who believe it’s time for a reform of our tax system. But I will suggest that a reform of the Canada Revenue Agency, including its number of employees , the knowledge level of those employees, and the department’s approach to audits and reassessments, is critical to making our tax system fairer.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at [email protected] .

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Business-class travel, smartwatch data among excessive expenses flagged in AG report on OilCo

Denise hanrahan says corporation won't follow government guidance on pay.

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Newfoundland and Labrador's auditor general raised red flags Wednesday in her first audit of the Oil and Gas Corp., the Crown corporation spun out of the now-defunct Nalcor Energy. 

Denise Hanrahan says her staff found leaders of the corporation, known as OilCo, refused to follow government direction on job classifications. They also found a lack of oversight for public funds and gaps in compliance with policies on conflict of interest — something she called a "very key part of the public service."

"It surprised me to see a Crown corporation actively work against direction given by Treasury Board," Hanrahan told reporters at a news conference in St. John's on Wednesday.

The 33-page report is the first of its kind about the fledgling Crown corporation, which had operated as part of Nalcor Energy until Nalcor was dissolved in 2021. The Liberal government shut down Nalcor over its handling of the Muskrat Falls hydroelectric project, putting non-petroleum assets under Newfoundland and Labrador Hydro. 

OilCo leads oil and gas activities in offshore Newfoundland and Labrador on behalf of the provincial government, but the report found the corporation doesn't operate in line with all government policies.

For example, OilCo does not classify positions on government pay scales, and most salaries exceed remuneration for similar jobs in government.

For Nalcor employees who transitioned to OilCo, classification could affect income.

"Classification would likely result in salaries being frozen indefinitely, or in termination and restaffing for transitioned positions," said Jim Keating, the corporation's chief executive officer, in the report.

Keating's income is approximately $312,740 per year. A similar position in government would be $182,789.

OilCo spent $23,805 on a consultant for position classification before the corporation's management abandoned the process. The corporation then spent $79,821 on alternative classification instead.

Hanrahan's first recommendation for OilCo is to classify its position on government scales, as directed by the province.

The corporation refused. Instead, they are proceeding with a market-based compensation system comparable to N.L. Hydro.

Smartwatch data

Position classifications weren't the only shortfall Hanrahan identified in her report.

"The other takeaway for me is the use of public money and the lack of oversight with respect to expenses," she said.

OilCo misused public funds by excessively spending on telecommunications, rent and travel, says the report. For example, technology that belonged to some former employees remained active long after they left the corporation.

In one case, a geophysicist and an engineer transitioned from Nalcor at OilCo's inception with smartwatches. These watches had data plans that remained active for three years, totalling $720.

Two cell were also left active for 19 months after employees left the organization, totalling $671.

For general cellphone services, OilCo paid $6,259 more than necessary during the audit period. 

According to the report, the corporation didn't switch to the lowest price plan for its monthly service package.

Rented furniture

Hanrahan said the corporation is paying exorbitant rates for rent at its headquarters on Hebron Way in St. John's, with $50,845 of the annual lease cost specifically identified for the repayment of "fit-up and furniture" costs.

"Fit-up and furniture" refers to OilCo's 237 pieces of rented furniture, artwork, and appliances, as well as the initial preparation to make the interior space move-in ready in 2017.

"Over our scope period, this expenditure amounted to $152,535. Across the initial five-year lease term and the subsequent five-year renewal term, fit-up and furniture would be expected to cost $508,455," the report said.

Travel expenses were also high at OilCo. Two employees upgraded air travel from economy to business class for a flight to France, paying an extra $10,268 to change the tickets. 

In another instance, an employee upgraded a flight at an incremental cost of $1,058.

The provincial government has strict criteria for travel expenses. Economy airfare is standard unless business class is required, such as when economy seats are unavailable.

Gaps in conflict of interest compliance were another topic of concern for Hanrahan. The report found that before 2023, OilCo board members didn't complete an annual certification as required by their code of business ethics and conduct.

The corporation also didn't provide formal conflict of interest training to employees or contractors until updates were made to the code last September.

Recommendations

Hanrahan issued five recommendations for OilCo, four of which the corporation has accepted, while rejecting the recommendation to classify employment on government scales.

OilCo accepted the recommendations to fill necessary vacant positions, ensure that expenses that are incurred do so in accordance with government policies, develop monitoring and reporting processes to ensure expenses, and ensure that all board members, employees, and certain contractors are trained in conflict of interest policies and that certification of understanding and compliance, as well as disclosure of any conflicts, is done annually.

  Download our  free CBC News app  to sign up for push alerts for CBC Newfoundland and Labrador.  Click here to visit our landing page .

ABOUT THE AUTHOR

Jenna Head is a journalist working with the CBC bureau in St. John's.

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• AG's OilCo report shows broken government promise of savings, oversight: Wakeham

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Line 25500 - Determine your maximum deduction

The maximum deduction you can claim for each eligible trip is the lowest of the following three amounts:

• either the  taxable travel benefits you received from employment for the trip or the portion of the $1,200 standard amount for the person travelling (you or your eligible family member) that you allocate to the trip (enter the amount for whichever option you choose in Step 3 , Chart B – column 3 of Form T2222 )

You can use the value of taxable travel benefits provided by your employer in the calculation in Step 3 if you meet both of the following conditions:

• You are an employee dealing at arm's length with your employer
• You had to include in your income (in the same year you have the travel expenses) the taxable travel benefits that you received from your employment in a prescribed zone

If you take a trip that begins and ends in one year and you are reimbursed the following year, you cannot claim the travel deduction for that trip. However, you can claim a travel deduction if you leave on a trip in one year and return the next year.

For example, you may leave on a trip in December and come back in January. If you receive non-refundable tickets or travel vouchers, the taxable travel benefit should be included in your T4 or T4A slip for the year the trip begins.

• the total travel expenses paid for the trip (enter the amount in Step 3 , Chart B  – column 4 of Form T2222 )
• the cost of the lowest return airfare available at the time of the trip between the airport closest to your residence and the nearest designated city to that airport (enter the amount in Step 3 , Chart B – column 5 of Form T2222 )

If you or an eligible family member uses the standard amount to calculate a travel deduction in the year, $1,200 is the maximum total amount that may be claimed for each individual who travels, for all trips taken in the year by that individual.

Regardless of whether you or an eligible family member is claiming the travel deduction and whether trips were medical or non-medical , it is an amount per person, not per trip.

If you or an eligible family member uses the taxable travel benefit received from employment to calculate a travel deduction in a year for an individual, then no one (including the individual) can use any part of their $1,200 standard amount in calculating a travel deduction claim for any trip taken by that individual in that year.

You can claim a travel deduction even if you are not claiming a residency deduction. For example, if your spouse or common-law partner claims both the basic and the additional residency amounts, you can still claim a travel deduction.

You cannot claim a travel deduction if either of the following applies:

• You or your eligible family member received or was entitled to receive non-taxable amounts as travel assistance, as a travel allowance, or as a reimbursement for travel expenses
• Someone else has already claimed the travel deduction for this trip on their return

How many trips can you claim

You can claim up to two trips  taken for non-medical reasons and up to two trips taken by each eligible family member.

You can also claim any number of medical trips taken by you or an eligible family member. However, no more than two non-medical trips taken by any individual (themself or an eligible family member) in a year can be claimed by all taxpayers combined.

Taxable travel benefits

Taxable travel benefits include:

• travel assistance, such as airline tickets or a trip on a company-owned airplane
• a travel allowance or lump-sum payment you received from your employer for travel expenses you incurred

Payments from your employer for travel that was not for employment purposes are generally considered taxable benefits. Box 32 of your T4 slip or box 028 of your T4A slip shows the taxable travel benefits you received in the year. This includes the benefits received specifically for medical travel which are shown in box 33 of your T4 slip or box 116 of your T4A slip .

You can use the benefit for medical travel in the calculation in Step 3, Chart B – column 3 of Form T2222 only if the medical services were for you or an eligible family member and were not available where you lived.

If you received a benefit that was not for any particular trip, you have to split it reasonably between the trips you are claiming.

Travel expenses

Travel expenses include:

• air, train, and bus fare
• vehicle expenses
• hotel or motel accommodations
• camping fees
• other incidental expenses such as taxis and road or ferry tolls

To calculate meal and vehicle expenses, you may choose the detailed or simplified method. Your total travel expenses equal the total of the value of travel assistance provided by your employer and the travel expenses incurred by you. Include any travel expenses paid by your employer. For more information about the detailed or simplified methods including the different rates, go to Meal and vehicle rates used to calculate travel expenses for 2023  or call 1-800-267-6999 .

If you are claiming expenses for a medical trip on Form T2222 , no one (including you) can claim them as medical expenses on their return.

In cases of medical travel, if the patient needs an attendant while travelling, the attendant's travel expenses are included as part of the patient's total travel expenses. This includes travel assistance provided by your employer or actual expenses you incurred.

If the attendant was you or an eligible family member: Include the cost of the attendant's lowest return airfare in Step 3 , Chart B – column 5 of Form T2222 , as part of the patient's expense for airfare. Include the cost of the attendant's travel expenses (excluding airfare) in column 4 , as part of the patient's travel expenses.

If the attendant was not you or an eligible family member: Do not include the cost of the attendant's lowest return airfare in column 5 as part of the patient's expense for airfare. Include the cost of the attendant's travel expenses (including airfare) in column 4 as part of the patient's travel expenses.

Lowest return airfare (LRA)

The LRA available at the time of the trip means the LRA ordinarily available for regularly scheduled commercial flights (excluding promotions or discounts that are not ordinarily available) on the date that the travel began. The airfare includes any airport tax, as well as goods and services tax / harmonized sales tax and provincial sales tax. Additional charges, such as flight cancellation insurance, meals, and baggage surcharges are not considered part of the lowest return airfare.

To complete  column 5 in Chart B  of  Form T2222 , Northern Residents Deductions , you must submit a lowest return airfare. To determine that airfare, you can use one of the following methods:

• Use the cost of airfare for a round trip from the airport closest to your residence to the nearest designated city. In case the Canada Revenue Agency (CRA) asks for proof of the cost, keep your receipts and any supporting documents.
• Use the amount in the lowest return airfare table which corresponds to your travel date and the airport closest to your residence. With this option, you do not need to have an airfare quote or any receipts or supporting documents.

Charlie has been living in Rankin Inlet, Nunavut, for the past three years. They travelled from Rankin Inlet to Iqaluit, Nunavut, to visit family on February 28 and returned on March 16 .

To calculate the travel deduction, Charlie needs to first figure out the three required amounts and enter them on Form T2222 . The cost of their flights was $1,633 and they did not have any other travel expenses. Charlie received a taxable travel benefit from their employer of $1,000.  Since Charlie did not take any other trips in the same year, they decide to use the full $1,200 standard amount instead of the taxable travel benefit they received from their employer, because that benefit is less than the $1,200 standard amount. Although Charlie did not travel to the nearest designated city nor did they leave the territory, they still have to determine the lowest return airfare (LRA) at the time of their trip. Charlie did not obtain a quote before they traveled. However, Charlie checks the table and uses the airfare table amount. The airfare table amount for Rankin Inlet to Winnipeg is $3,143.

Now that Charlie has obtained the three amounts, they can calculate their travel deduction. The maximum that Charlie can claim is the lowest of the following three amounts:

• the taxable travel benefit they received from their employer for the trip or the part of the $1,200 standard amount that Charlie allocated to that trip ($1,200)
• the total travel expenses paid for the trip ($1,633)
• the LRA available at the time of the trip between the airport closest to their residence and the nearest designated city to that airport ($3,143)

The CRA would accept Charlie’s amount for the LRA, because they chose to use the airfare table amount.

They will claim $1,200 for their trip, because it is the lowest of the three amounts.

Alex has always lived in Aklavik, Northwest Territories . They travel to Edmonton, Alberta, for a vacation and it is the only trip they take in the year. Alex can only travel from Aklavik by charter. The cost of the charter flights to the nearest commercial airport in Inuvik and back was $2,600. The cost of the flights from Inuvik to Edmonton and back was $1,210. Edmonton also happens to be the nearest designated city when flying from Inuvik. Alex spent an additional $1,000 for travel expenses in Edmonton. Alex received $2,000 as a taxable travel benefit from their employer.

To calculate the travel deduction, Alex needs to first figure out the three required amounts and enter them on Form T2222 . Since the taxable travel benefit Alex received from their employer is greater than the $1,200 standard amount, they decide to claim the taxable travel benefit. Alex bought economy tickets for the flights from Inuvik to Edmonton and back. Alex’s total flight expenses were $3,810. Their total travel expenses were $4,810.

Since Alex has all of the information they need, they can calculate their travel deduction. The maximum that Alex can claim is the lowest of the following three amounts:

• the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Alex allocated to that trip ($2,000)
• the total travel expenses paid for the trip ($2,600 + $1,210 + $1,000 = $4,810)
• the lowest return airfare (LRA) available at the time of the trip, between the airport closest to his residence and the nearest designated city to that airport ($2,600 + $1,210 = $3,810)

The CRA would accept the amount of $3,810 as the LRA, because the charter flight was to the nearest commercial airport and the flight from Inuvik to Edmonton was to the nearest designated city. If Alex is selected for review, they will need to provide their receipts for the flights to support their claim for the LRA.

Alex claims $2,000 for this trip, because it is the lowest of the three amounts.

Chris has lived in Dawson City , Yukon, for the past 10 years. They drove to Whitehorse, Yukon, for a vacation and it is the only trip they took during the year. Chris left Dawson City on July 26 and returned on August 9 . From their employer, Chris received a taxable travel benefit of $2,000 for their trip, and the total cost of their trip was $1,500.

Since Chris’s taxable travel benefit received from their employer is greater than the $1,200 standard amount, they decide to claim the taxable travel benefit. Even though Chris did not fly for their trip, and they did not leave the territory, they still have to determine the lowest return airfare (LRA). Chris got a quote before they left for their trip. They went online July 19 and got a quote of $1,000 for the lowest return airfare for July 26 (the day their trip began) to the nearest designated city.

• the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Chris allocated to that trip ($2,000)
• the total travel expenses paid for the trip ($1,500)
• the LRA available at the time of the trip, between the airport closest to their residence and the nearest designated city to that airport ($1,000)

The CRA would accept the amount of $1,000 for the LRA, because the quote for the flight was for the lowest return airfare to the nearest designated city. If Chris was selected for review, they would need to send their documents to support their claim for the LRA.

Chris claims $1,000 for this trip, which is the lowest of the three amounts.

Taylor has lived in Fort McMurray , Alberta, for two years. They decided to go to Edmonton, Alberta, for a vacation in March and it was the only non-medical trip they took in the year. Taylor decided to fly business class instead of economy. Their ticket cost $1,440 and their total expenses for the trip were $2,100. From their employer, Taylor received $1,500 as a taxable travel benefit for their trip. As Taylor did not get a quote for the lowest return airfare (LRA), and the actual cost of the flight they took was not economy class, Taylor claims the airfare table value of $894 for the LRA.

Taylor decides to claim the taxable travel benefit, because the $1,500 they received from their employer is greater than the $1,200 standard amount.

Since Taylor has all the information they need, they can calculate their travel deduction. The maximum that Taylor can claim is the lowest of the following three amounts:

• the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Taylor allocated to that trip ($1,500)
• the total travel expenses paid for the trip ($2,100)
• the LRA available at the time of the trip, between the airport closest to their residence and the nearest designated city to that airport ( Taylor claims the table value for the LRA of $894 , rather than incorrectly claiming the cost of their business class tickets.)

Taylor claims $894 for this trip, because it is the lowest of the three amounts.   

Since Taylor lives in a prescribed intermediate zone, their total travel deduction is one-half ($447) of the total of the lowest amounts for each trip they took ($894) .

Edward, Anna, and their two children are a family of four. They took a two week vacation and drove from Yellowknife to Edmonton in March 2022.

Edward received a $900 taxable travel benefit from his employer, which is an arms-length employer. He calculated his family’s travel expenses using the simplified method:

• Simplified cost to drive round-trip to Edmonton = 2,950 km x 0.675 (cents per km from Northwest Territories) = $1,911.25
• Accommodations cost = $600 (receipts always required)
• Simplified cost of meals for 4 people = $69 (meal rate per day per person) x 4 people x 14 days travelling = $3,864 or $966 per person
• $6,455 total travel expenses split between the eligible family members for Column 4

As Edward did not get a quote on or before the day of travel and he did not fly, he used the LRA amount available in the CRA’s airfare tables on canada.ca/lowest-return-airfare for the trip.

The LRA in the airfare table for a flight from Yellowknife to the nearest designated city, which is Edmonton, in March 2022 is $923 .

Since the LRA is the lowest of the three amounts, Edward will claim a total of $3,692 (the LRA for each person x 4 people traveling).

Screenshot of Chart A on form T2222. For line A, the travelers are identified as Edward, Anna, Child 1, and Child 2. For line B, Edward (name 1) is claiming the standard amount of $1,200 (amount 1) for each of the four travelers. For line C, the total amount in row B is identified as $1,200 for each traveler. 

Screenshot of Chart B on form T2222. Under column 1, the travelers are identified as Edward, Anna, Child 1, and Child 2. Under column 2, the word vacation has been included as the purpose of the trip for each traveler. Under column 3, the standard amount of $1,200 has been included for each traveler. Under column 4, Edward is claiming $2,957, Anna is claiming $1,566, Child 1 is claiming $966, and Child 2 is claiming $966. Under column 5, $923 has been included as the cost of the lowest return airfare for each traveler. Under the Zone A column, $923 has been identified as the lowest amount from column 3, 4 or 5 for each traveler, for a total of $3,692 (box A). Box B is left empty. The total from box A ($3,692) plus the total from box B ($0) is $3,692, which is the final amount of the travel deduction that can be claimed for this trip.

Note: Individual expenses should be put under a specific family member where applicable (for example, the cost of a meal or an airline ticket).

Common expenses cannot be split and should be put under the person who paid the expense (or their spouse or common-law partner). In the example, Edward claimed the mileage expense and Anna claimed the accommodation expense.

Forms and publications

• Income Tax Package
• Form T2222, Northern Residents Deductions

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25+ Essential Business Travel Statistics [2023]: How Much Do Companies Spend On Business Travel

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Research Summary. Whether you’re flying out of town for that important business meeting or simply attending an annual workshop, business travel is an important part of any big company’s protocol. When it comes to business travel, our extensive research shows that:

Business travel in the U.S. from domestic and international travelers amounts to around $387 billion in annual revenue .

While business trips currently account for roughly 12% of total U.S. air travel , they make up to 75% of airlines’ profits .

At least 35% of U.S. businesses engage in business travel.

From 2019-2020, the number of business trips taken in the U.S. dropped from 464 million to 185 million .

The average business trip costs Americans $949 in travel fees .

General Business Travel Statistics

Knowing that business travel accounts for up to 75% of air travel revenue, it’s not hard to see why it’s encouraged. In fact, business travel is so lucrative that it even affects the U.S. GDP. Here are the facts:

In 2016 alone, business travel contributed $547 billion to the United States’ total GDP.

That’s around 3% of the total GDP, a number which stayed rather stable until 2020 when the COVID-19 pandemic negatively affected business travel. In reality, these high numbers might never return, as experts predict 36% less business travel post-COVID.

In 2022 business travel accounted for 12% of U.S. air travelers.

In 2022 there were over 460 million business travelers, which is a noticeable increase from 2020’s drop to 185 million. However, both years have had a relatively even share of business travelers (around 12-13%).

Business travel can account for up to 75% of an airline company’s revenue.

This trend can mostly be attributed to the booking of first-class tickets. Instead of saving money on business trips, more and more corporations are looking to provide their travelers with maximum comfort and convenience. While doing so makes the company look better, these decisions are mostly made due to competition.

Business travelers account for as much as 40% of hotel guests.

63% of these travelers are male, and 50% are between 35-54. Further, 56% of these individuals are employed in a professional or managerial position that earns them at least $127,000 per year.

Business Trip Statistics

Now that we know how profitable and common business trips are in the U.S., what does the average business trip look like? Well, according to our extensive research:

The average length of a domestic business trip in the U.S. is three days.

The average length for an international trip is 5-6 days. Overall, these numbers seem to slowly decline over time, with the old average (2016) for international business trips being just over six days.

Roughly 26% of business trips are only one day long.

This is another contributing factor for companies’ high cost of business trips, as same-day flights can wrack up costs. However, this does save the company money elsewhere (lodging, food, etc.).

38% of U.S. business travel is for meetings and events.

ME&I travel ( meetings , events, and incentive travel) amounts to $139.3 billion of all business travel spending, nearly 42% of total business travel spending.

Roughly 1.3 million business trips are taken in the U.S. every day.

A number that took a hit from the 90% reduction in travelers in 2020. While these numbers may not recover to pre-COVID numbers, 2021 has increased.

Business Travel Spending Statistics

As shown, a good percentage of businesses invest in business travel despite the cost. However, you might be surprised to learn just how much business travel costs companies and employees. According to our extensive research:

The average three-day domestic trip costs between $990-$1,293.

While the average international trip costs an average of $2,600 or more. For this reason, business trips need to be especially valuable for the company or employee taking them.

The average company spends 17-27% of its total travel budget on airfare.

You might be surprised to learn that airfare isn’t the most expensive part of business travel. Overall, the average domestic flight is $470, give or take how far away the destination is.

Over 20% of a typical business travel budget goes to food expenses.

That’s even more than flights and can amount to hundreds of dollars in expenses. One of the best ways to avoid this hefty cost is to utilize free hotel breakfasts. After all, never buying breakfast is a great way to cut food expenses.

The most expensive aspect of a business trip is lodging, making up around 34% of total costs.

Hotels make a lot of money from business travelers and the companies who sponsor their trips. This is especially true given the fact that up to 40% of hotel guests are business travelers.

Companies spend roughly $799 per person per day during a business trip.

Business Traveler Statistics

Because only 35% of companies actively partake in business travel, and it can be rather expensive, the demographics of travelers can be rather skewed. According to our research:

At least 50% of business travelers are between 35-54.

Undoubtedly, this abundance of higher ages relates to an employee’s position within the company. Older workers are more likely to have high-level positions . This can also be shown by the fact that 56% of business travelers hold professional or managerial positions that earn at least $127,000 per year.

The average business traveler takes roughly 6.8 trips per year.

And this number is even higher for millennials , who take an average of 7.4 trips per year. In that way, younger generations take more business trips on average (per person) than their older counterparts.

47% of female travelers are traveling on business.

While female business travelers are slightly less common than male travelers, women (on average) tend to enjoy their trips more than their male counterparts. Overall, 45% of women have positive experiences while traveling on business compared to 39% of men.

As of 2021, only 12% of corporate travel representatives feel as though their employees are unwilling to travel.

And with new CDC travel guidelines in 2021, 61% of employees now feel somewhat more comfortable traveling for business.

It takes an average of 38 minutes to complete and correct one expense report.

While it only takes 20 minutes (on average) to complete the expense report , at least 19% of expense reports have errors. Plus, with an average of 1.5 travel expense reports filed per month, that means employees can spend up to an hour filing them each month.

Business Travel Company Policy Statistics

Due to the potentially expensive nature of business travel, it’s no surprise that companies create business travel policies. Here are some stats related to business travel policies:

72% of corporate travel managers haven’t achieved their desired travel policy compliance level.

For the most part, this lack of compliance is due to shortfalls in the traveler ’s experience, fairness and transparency, and not meeting budget requirements.

Only 50% of business travelers follow their company’s travel policy.

In fact, 60% of business travelers don’t even understand their company’s travel policy, making it especially difficult to follow.

81% of business travel is done via personal vehicle.

By contrast, only 16% of business travel is air travel . That means most business travelers travel to their destination by car.

90.6% of corporate travel managers agree that business travel is vital for company growth.

And this sentiment comes from a genuine place, as on average, businesses earn a $2.90 increase in profit for every dollar spent on corporate travel. That equates to an average $9.50 increase in revenue.

Business Travel Trends and Projections

The 2020 height of the COVID-19 pandemic took a major toll on business travel. While business travel has started to recover in 2021, the number of travelers is still around half of what it was pre-COVID. After extensive research, here are the facts about business travel trends:

From 2019-2020, the number of business travelers in the U.S. dropped from 464 million to only 185 million.

From 2010 to 2019, business travelers remained steady between 440 million and 465 million. However, this number dropped drastically in 2020 and then increased to 229 million in 2021.

From 2010-2019, the number of business travelers grew by 4%.

However, the COVID-19 pandemic saw the number of business travelers decrease by 60%, which aligns with other travel declines caused in 2020.

The business travel industry is expected to experience a CAGR of 13.2% between 2021 to 2028.

Luckily, trends seem to show that business travel will start to recover from the COVID-19 pandemic over the next couple of years. Estimates predict that the value of the industry will increase from $695.9 billion in 2020 to $2.1 billion by 2028.

Business Travel FAQ

How many people travel for business annually?

Over 460 million people travel for business annually in the U.S. This is a massive 150% increase from 2020 when there were only 185 million, and similar to 2019’s numbers.

For instance, from 2019-2020, the number of business travelers dropped by 60%. This is mostly due to COVID-19, which affected the travel industry with restrictions and regulations through 2021.

What types of businesses travel the most?

The types of businesses that travel the most are as follows:

Sales Representative

Retail Buyer

Event Planner

Traveling Nurse

International Aid Worker

Civil Servant

Travel Writer

Travel Agent

Flight Attendant

These jobs are all related to or require business travel in one way or another. However, it’s also worth noting that 56% of business travelers hold professional or managerial positions that earn at least $127,000 per year.

How big is the business travel market?

The business travel market is worth an estimated $933 billion as of 2022. From 2020 to 2021, the market rebounded by 14%, from where it had previously dropped to $695 billion. Overall, the business travel market is expected to experience a CAGR of 13.2% between 2021 to 2028.

What percent of travel is business travel?

Approximately 12% of U.S. travel is business travel as of 2022. That number is slightly down from 13.6% in 2021, but half of what it was pre-COVID. For instance, in 2019, business travelers made up at least 25% of all travelers.

How much do companies spend on business travel?

Companies spend over $111.7 billion each year in the U.S. on business travel. Per company, travel costs typically equate to roughly 10% of that company’s annual revenue.

Business travel is an important investment for industries and companies all over the United States. That’s why, despite it costing them between $990-$1,293 per trip, they still choose to send employees on them. In fact, pre-COVID, at least 25% of U.S. travelers were business travelers.

These travelers tend to fall under certain demographics, with at least 50% of business travelers between the ages of 35-54 and 56% of business travelers holding professional or managerial positions that earn at least $127,000 per year.

However, COVID-19 took a heavy toll on the industry. The number of domestic business travelers dropped from 464 million to 185 million (25% to 13%). This job has affected airliners, hotels, the food industry , and more. Luckily, the business travel industry has a CAGR of 13.2% between 2021 and 2028, which indicates at least somewhat of a rebound.

Global Business Travel. “Business Travel Responsible for $547 Billion in U.S. GDP in 2016, Creates Over 7.4 Million Jobs.” Accessed on December 8th, 2021.

Statista. “Number of domestic business and leisure trips in the United States from 2008 to 2019, with a forecast until 2024.” Accessed on December 8th, 2021.

Investopedia. “How Much Airline Revenue Comes From Business Travelers?” Accessed on December 8th, 2021.

AHLA. “Lodging Industry Trends 2015.” Accessed on December 8th, 2021.

Travel Leaders Corporate. “09 Nov Travel Leaders Corporate Releases Q3 Business Travel Trends Data.” Accessed on December 8th, 2021.

U.S. Travel Association. “U.S. Travel Answer Sheet.” Accessed on December 8th, 2021.

Bureau of Transportation. “U.S. Business Travel.” Accessed on December 8th, 2021.

GBTA. “U.S. Business Travel – By The Numbers.” Accessed on December 8th, 2021.

TravelBank. “How Much Should a Business Trip Cost?” Accessed on December 8th, 2021.

JTB. “Important Business Travel Statistics.” Accessed on December 8th, 2021.

Trondent Development Corp. “Business Travel by the Numbers.” Accessed on December 9th, 2021.

GTI Travel. “What do Female Business Travelers do Differently from their Male Counterparts.” Accessed on December 9th, 2021.

Hotel Management. “GBTA poll finds positive momentum for business travel.” Accessed on December 9th, 2021.

SAP Concur. “Save time and money on expense report processing.” Accessed on December 9th, 2021.

TravelPerk. “5 reasons why traveler satisfaction is the key to a successful travel program.” Accessed on December 9th, 2021.

Cision. “Business Travel Market Size to Reach USD 2,001.1 Billion by 2028 at CAGR 13.2% – Valuates Reports.” Accessed on December 9th, 2021.

Certify. “Understanding the average cost of business travel.” Accessed on December 9th, 2021.

Travel jobs statistics

Zippia ’s research team connects data from disparate sources to break down statistics at the job and industry levels. Below you can dig deeper into the data regarding employees who work in travel or browse through Transportation jobs .

Overview | Jobs Salary

Browse Transportation Jobs

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Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.

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Key benefits of travel medical insurance

• Travel medical insurance coverage
• Who needs medical travel insurance?

Choosing the right travel medical insurance

How to use travel medical insurance, is travel medical insurance right for your next trip, travel medical insurance: essential coverage for health and safety abroad.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

• Travel medical insurance covers unexpected emergency medical expenses while traveling.
• Travelers off to foreign countries or remote areas should strongly consider travel medical insurance.
• If you have to use your travel medical insurance, keep all documents related to your treatment.

Of all the delights associated with travel to far-flung locales, getting sick or injured while away from home is low on the savvy traveler's list. Beyond gut-wrenching anxiety, seeking medical treatment in a foreign country can be exceedingly inconvenient and expensive.

The peace of mind that comes with travel insurance for the many things that could ail you while abroad is priceless. As options for travel-related insurance abound, it's essential to research, read the fine print, and act according to the specifics of your itinerary, pocketbook, and other needs.

Travel insurance reimburses you for any unexpected medical expenses incurred while traveling. On domestic trips, travel medical insurance usually take a backseat to your health insurance. However, when traveling to a foreign country, where your primary health insurance can't cover you, travel medical insurance takes the wheel. This can be especially helpful in countries with high medical care costs, such as Scandinavian countries.

Emergency medical evacuation insurance

Another benefit that often comes with travel medical insurance, emergency medical evacuation insurance covers you for any costs to transport you to an adequately equipped medical center. Emergency medical evacuation insurance is often paired with repatriation insurance, which covers costs associated with returning your remains to your home country if the worst happens. 

These benefits are for worst-case scenarios, but they might be more necessary depending on the type of trips you take. Emergency medical evacuation insurance is helpful if you're planning on traveling to a remote location or if you're traveling on a cruise as sea to land evacuations can be costly. Some of the best travel insurance companies also offer non-medical evacuations as part of an adventure sports insurance package.

It's also worth mentioning that emergency medical evacuation insurance is required for international students studying in the US on a J Visa. 

Types of coverage offered by travel medical insurance

The exact terms of your coverage will vary depending on your insurer, but you can expect most travel medical insurance policies to offer the following coverages.

• Hospital room and board
• Inpatient/outpatient hospital services
• Prescription Drugs
• COVID-19 treatment
• Emergency room services
• Urgent care visits
• Local ambulance
• Acute onset of pre-existing conditions
• Dental coverage (accident/sudden relief of pain)
• Medical care due to terrorist attack
• Emergency medical evacuation 
• Repatriation of mortal remains
• Accidental death and dismemberment

Travel medical insurance and pre-existing conditions

Many travel insurance providers will cover pre-existing conditions as long as certain conditions are met. For one, travelers need to purchase their travel insurance within a certain time frame from when they placed a deposit on their trip, usually two to three weeks. 

Additionally, travel insurance companies usually only cover stable medical conditions, which are conditions that don't need additional medical treatment, diagnosis, or medications.

Who needs travel medical insurance?

Even the best-laid travel plans can go awry. As such, it pays to consider your potential healthcare needs before taking off, even if you are generally healthy. Even if well-managed, preexisting conditions like diabetes or asthma can make a medical backup plan even more vital.

Having what you need to refill prescriptions or get other care if you get stuck somewhere other than home could be essential to your health and well-being. That's without counting all the accidents and illnesses that can hit us when away from home.

Individuals traveling for extended periods (more than six months) or engaging in high-risk activities (think scuba diving or parasailing) should also consider a solid medical travel plan. Both scenarios increase the likelihood that medical attention, whether routine or emergency, could be needed.

In the case of travel via the friendly seas, it's also worth considering cruise trip travel insurance . Routine care will be available onboard. But anything beyond that will require transportation to the nearest land mass (and could quickly become extremely expensive, especially if you're in another country).

Like other types of insurance, medical travel insurance rates are calculated based on various factors. Failing to disclose a preexisting health condition could result in a lapse of coverage right when you need it, as insurers can cancel your policy if you withhold material information. So honesty is always the best policy.

Even the best-laid travel plans can go awry. As such, it pays to consider your potential healthcare needs before taking off, even if you are generally healthy. Making the right choice when shopping for travel medical insurance can mean the difference between a minor hiccup in your travels and a financial nightmare. 

When a travel insurance company comes up with a quote for your policy, they take a few factors into consideration, such as your age, your destination, and the duration of your trip. You should do the same when assessing a travel insurance company. 

For example, older travelers who are more susceptible to injury may benefit from travel medical insurance (though your premiums will be higher). If you're traveling for extended periods throughout one calendar year, you should look into an annual travel medical insurance plan . If you're engaging in high-risk activities (think scuba diving or parasailing), you should seek a plan that includes coverage for injuries sustained in adventure sports.

In the case of travel via the friendly seas, it's also worth considering cruise trip medical travel insurance. Routine care will be available onboard. But anything beyond that will require transportation to the nearest land mass (and could quickly become extremely expensive, especially if you're in another country).

Travel medical insurance isn't just for peace of mind. If you travel often enough, there's a good chance you'll eventually experience an incident where medical treatment is necessary.

Before you submit your claim, you should take some time to understand your policy. Your travel medical insurance is either primary (you can submit claims directly to your travel medical insurance provider) or secondary (you must first submit claims to your primary insurance provider). In the case of secondary travel medical insurance, a refusal notice from your primary insurance provider, even if it does not cover medical claims outside the US, is often required as evidence of protocol.

On that note, you should be sure to document every step of your medical treatment. You should keep any receipts for filled prescriptions, hospital bills, and anything else documenting your medical emergency.

As many people have found out the hard way, reading the fine print is vital. Most travel insurance policies will reimburse your prepaid, nonrefundable expenses if you fall ill with a severe condition, including illnesses like COVID-19. 

Still on the fence about whether or not  travel insurance is worth it ? It's worth noting that many travel insurance plans also include medical protections, so you can also protect against trip cancellations and other unexpected developments while obtaining travel medical insurance.

While short, domestic trips may not warrant travel medical insurance, it may be a good idea to insure longer, international trips. You should also consider travel medical insurance for trips to remote areas, where a medical evacuation may be expensive, and more physically tasking trips.

While shopping for travel medical insurance may not be fun, a little advance leg work can let you relax on your trip and give you peace of mind. After all, that is the point of a vacation. 

Medical travel insurance frequently asked questions

Trip insurance covers any unexpected financial losses while traveling, such as the cost of replacing lost luggage, trip interruptions, and unexpected medical expenses. Travel medical insurance just covers those medical expenses without the trip interruption or cancellation insurance.

Travel insurance companies usually offer adventure sports as add-on coverage or a separate plan entirely. You'll likely pay more for a policy with adventure sports coverage. 

Many travel medical insurance policies now include coverage for COVID-19 related medical expenses and treat it like any other illness. However, you should double-check your policy to ensure that is the case.

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