Information and services website for entrepreneurs.

Expenses relating to business travel by entrepreneurs and employees

Business travel by employees and entrepreneurs entails certain costs. See what travel expenses you need to bear as an employer and what you are entitled to as an entrepreneur. See how to settle the costs of business travel – by you or by your employees.

What are employees travelling on business domestically and internationally entitled to

If you send an employee to travel on business, you must bear the related expenses. Business travel is understood as the performance of an official task at the employer’s request, away from the place where the employer’s registered office is located or away from the regular place of work.

The conditions for payments made to employees for domestic and international business travel are set out in a collective agreement, remuneration regulations or an employment contract. If your company is not covered by a collective agreement or you are not required to establish remuneration regulations, these conditions may be set out in an employment contract. If your company does not have its own rules in this regard, the Regulation of the Minister for Labour and Social Policy of 29 January 2013 on amounts due to employees of state or local government budgetary units for business travel applies.

For domestic and international travel, the employee is entitled to:

  • an allowance (the equivalent of increased food costs for domestic travel, and the equivalent of food costs and other petty expenses for international travel)
  • reimbursement of the costs of transport, journeys by means of local transport and accommodation, as well as other documented expenses, determined or recognised by the employer, depending on justified needs.

As an employer, you must specify the means of transport for business travel, both domestic and international. The employee is entitled to reimbursement of the transport costs incurred, documented by tickets or invoices indicating the ticket price.

You may consent to the employee using his or her own passenger vehicle or, for example, motorcycle for both domestic and international travel.
In such a situation, you must multiply the number of kilometres travelled by a rate per kilometre and reimburse the employee for the costs calculated in this manner.
The rate depends on the type of vehicle. It cannot be higher than that set out in the Regulation of the Minister for Infrastructure of 25 March 2002 on the conditions for determining and reimbursing the costs of using passenger vehicles, motorcycles and mopeds not owned by employers for business purposes, i.e.:

  • PLN 0.5214 for passenger vehicles with an engine capacity of up to 900 cm3
  • PLN 0.8358 for passenger vehicles with an engine capacity exceeding 900 cm3
  • PLN 0.2302 for motorcycles

You must also reimburse the employee for other travel expenses, provided that they were necessary and were documented by the employee. They may include fees for baggage, travel by toll roads and motorways, parking in paid parking zones and parking spaces.

The costs of domestic travel by employees: allowances and accommodation

Allowances

The allowance for domestic business travel is PLN 38 for 1 day of travel. This is the minimum rate, but you may set a higher one in your company.

If the employee’s travel lasts:

  • less than 8 hours – the employee is not entitled to the allowance,
  • from 8 to 12 hours – the employee is entitled to 50% of the allowance,
  • more than 12 hours – the employee is entitled to the full allowance.

If domestic business travel lasts longer than 1 day, the employee is entitled to the full allowance for each day, and to 50% of the allowance for an incomplete but commenced day, up to 8 hours.

The allowance is reduced if food is provided free of charge to the employee. This also applies to stays in hotels offering accommodation and board. You must deduct 25% of the allowance for breakfast, 50% for dinner and 25% for supper.

Accommodation

You must reimburse the employee for the fee for hotel accommodation, confirmed by a bill. However, the amount for an overnight stay cannot exceed 20 times the amount of the allowance (PLN 760).

If you did not provide accommodation for the employee and the employee does not provide a bill for accommodation, that person will be entitled to a lump-sum payment of 150% of the allowance.

The costs of international travel by employees

Allowances

In companies that have not put in place their own arrangements for calculating allowances for international business travel (e.g. in remuneration regulations), the rates set out in the Regulation of the Minister for Labour and Social Policy of 30 June 2022 on amounts due to employees of state or local government budgetary units for business travel are used to calculate the allowances.

The amount of the allowance for international travel depends on which country the employee goes to. For example, the allowance amounts to EUR 49 for Germany, EUR 41 for Ukraine and GBP 35 for the United Kingdom.

Please note! You may determine other limits than those set out in the legislation. For example, you may set out different allowances for different countries, regions etc. in remuneration regulations, or adopt a fixed amount regardless of which country employees go to. Just remember that the minimum amount of the allowance for international travel cannot be lower than the allowance for domestic business travel. This means that the rate of the allowance for domestic business travel is the minimum rate. If you determine an allowance exceeding the limit indicated in the mentioned-above regulation and pay it to the employee, the surplus will constitute revenue on which the employee will pay tax.

If the employee’s travel lasts:

  • up to 8 hours – the employee is entitled to 1/3 of the allowance,
  • from 8 to 12 hours – the employee is entitled to 50% of the allowance,
  • more than 12 hours – the employee is entitled to the full allowance.

Important! The duration of international travel is calculated:

  • for travel by land – from the moment when the employee crosses the Polish border on the way to another country until the moment when the employee crosses the Polish border on the way back
  • for travel by air – from the moment when the aeroplane takes off from the last airport in Poland on the way to another country until the moment when the aeroplane lands at the first airport in Poland on the way back
  • for travel by sea – from the moment when the vessel (ferry) leaves the last Polish port until the moment when the vessel (ferry) arrives at the first Polish port on the way back.

The employee is not entitled to the allowance if they receive a payment for food equal to the amount of the allowance during international travel. If the payment is lower than the allowance, the employee is entitled to compensation up to the amount of the allowance.

If full board is provided free of charge, the employee is entitled to 25% of the allowance.

The amount of the allowance is reduced by the cost of food provided free of charge (also in respect of hotel services), assuming that breakfast constitutes 15% of the allowance, and dinner and supper constitute 30% of the allowance each.

Accommodation

The employee is entitled to reimbursement of accommodation costs incurred during international travel, confirmed by a bill, but only up to the limit set in the Regulation of the Minister for Labour and Social Policy of 30 June 2022 on amounts due to employees of state or local government budgetary units for business travel are used to calculate the allowances.

A separate limit is set for every country, for example EUR 150 for Germany and EUR 160 for Belgium.

Example

Jacek was sent to Ukraine on business by his employer. He spent 2 nights in a hotel, for which he paid EUR 240 in total (2 x EUR 120). The employer will reimburse him for the entire amount, as he did not exceed the limit of EUR 180 a day for Ukraine.

In justified cases, you may reimburse the employee for higher costs, confirmed by a bill. If the employee does not provide a bill for accommodation, they are entitled to a lump-sum payment of 25% of the limit.

You do not reimburse accommodation costs if you provide free accommodation for the employee by yourself or a foreign contractor does so.

Journeys

At the place of destination abroad (and at the place where the employee spent the night), the employee is entitled to a lump-sum payment equal to the amount of one allowance to cover the costs of journeys to and from a railway station, bus station, airport or seaport.

For a one-way journey, the lump-sum payment is 50% of the allowance. The employee is entitled to a lump-sum payment of 10% of the allowance for each commenced day of international travel to cover the costs of journeys by means of local transport.

Please note! The employee is not entitled to the lump-sum payments if they travel on business in a company car or a private vehicle or if free transport is provided.

Medical treatment costs

If the employee falls ill during international travel, you must reimburse that employee for the costs of medical treatment abroad, provided that they are documented and were necessary. The employee cannot seek reimbursement of the costs of medicines, for example, that they did not need to purchase abroad. Reimbursement of the costs of plastic surgery and beauty treatment or the costs of purchasing orthopaedic prostheses, dentures or glasses also cannot be sought.

Important! The employee is entitled to 25% of the allowance for each day (24 hours) spent in a hospital or another medical centre during international travel.

Settlement of domestic and international travel by employees

For international travel, the employee must receive from you an advance payment to cover the necessary costs before departure. Its amount depends on a preliminary calculation of these costs. The advance payment may be made in a foreign currency or in PLN (subject to the employee’s consent) at the average PLN exchange rate announced by the National Bank of Poland on the date on which the advance payment is made.

After the return, the employee must settle the travel with you within 14 days. The employee should submit documents to prove the costs incurred, for example invoices for accommodation or tickets.

Important! The employee does not need to document how allowances were spent.

If a document (bill, invoice, ticket) could not be submitted, the employee must submit a written declaration stating the expense incurred and the reasons why it was not documented.

For the employee, an allowance is exempt from income tax up to the limit set in the legislation. You do not take it into account when calculating the income tax withheld for the employee. If, however, you pay an allowance exceeding the limit to the employee, the surplus will constitute revenue on which tax should be paid.
Such an allowance is a tax-deductible expense for the employer, also up to the limit set in the legislation.

Example

An employer sent an employee on a 2-day domestic business trip. The allowances (PLN 60) paid to the employee will be a tax-deductible expense for the employer, and the employee will not pay personal income tax (PIT) on them.

As a rule, the employee does not pay tax on the reimbursed travel costs. If, however, a limit for such expenses is set in the legislation, the employee pays PIT on the surplus over the limit, and the surplus over the limit is not a tax-deductible expense for the employer.

The expenses reimbursed to the employee for using his or her own car will be a tax-deductible expense for you if:

  • they were documented in a mileage log maintained by the employee
  • they did not exceed the limit (for passenger vehicles: PLN 0.5214 per kilometre for an engine capacity of up to 900 cm3 or PLN 0.8358 per kilometre for an engine capacity exceeding 900 cm3; for motorcycles: PLN 0.2302 per kilometre).

Expenses over the limit are not a tax-deductible cost for the employer, and constitute revenue for the employee.

Example

Jacek travelled on business in his own car with an engine capacity not exceeding 900 cm3. He travelled 500 km, and the employer paid him a mileage allowance of PLN 500. However, the employer will include only PLN 260.7 (PLN 0.5214 x 500) in tax-deductible expenses. The surplus over this amount, i.e. PLN 239.3, will constitute Jacek’s revenue.

Important! You will not be able to include expenses relating to business travel by the employee in tax-deductible expenses if you have chosen to pay lump-sum tax on registered revenues or fixed-amount tax. With these forms of taxation, costs cannot be deducted.

The costs of travel by entrepreneurs

Business travel as a tax-deductible expense

As a rule, tax-deductible expenses are expenses incurred to earn revenue and to maintain or secure a source of revenue. Therefore, if you travel on business by yourself, you may deduct the expenses incurred for this purpose from revenue as tax-deductible expenses.

You should preserve all evidence that the travel was connected to your business activities, for example orders, purchase invoices and contractors’ offers gathered during that travel.

If you travel by means of public transport (train, bus, airplane), the ticket price will be an expense. There are no limits on the type and class of means of transport. However, as with other expenses, you must abide by the rule that expenses must be reasonably justified.

If you travel in a car which constitutes the company’s fixed asset, you will deduct 100% of the car expenses, provided that you maintain a mileage log. If you do not maintain it, you will deduct 75% of the expenses.

Please note! In order to deduct 100% of tax-deductible expenses for PIT purposes, you must maintain records like those maintained for VAT purposes. They differ from records maintained for the purpose of settling business travel by employees in that, inter alia, you do not calculate transport costs (the number of kilometres travelled x the rate per kilometre).

If you use your private car (which is not the company’s property) for business purposes during travel, you do not need to maintain any mileage log. In such a case, you will deduct 20% of the car expenses.

Allowances

While you cannot deduct food expenses actually incurred during business travel, you are entitled to an allowance of the same amount as an employee.

Example

Józef is self-employed and provides engineering services. He accepted an order from a customer established in another province, as a result of which he needs to travel frequently. He is entitled to an allowance of PLN 30 for each day of travel. Assuming that he spends 16 days a month working for the customer, he will deduct PLN 480 (16 x PLN 30).

Company expenses, including allowances for trips, must be documented in order to be included in tax-deductible costs. Allowances are included in lump-sum costs. They are settled on the basis of internal evidence, which should contain at least the full name, the purpose of travel, the name of the place of destination, the number of hours and days of business travel (the date and time of departure and return), and the rate and value of allowances due.

Accommodation and local transport

You may settle accommodation expenses on the basis of an invoice or a bill. The limits applicable to employees do not apply to entrepreneurs.

If you use means of local transport during business travel, you must settle the amount of costs confirmed by a ticket or another document indicating the expense incurred. The lump-sum payments applicable to employees do not apply to entrepreneurs.

You may also deduct other business expenses, for example the purchase of tickets for various fairs, exhibitions and shows, in the amount indicated in an invoice or a bill.

Important! You cannot settle business travel expenses if you have chosen to pay lump-sum tax on registered revenues or fixed-amount tax.

How to convert costs in a foreign currency

If you received documents confirming expenses in another currency during travel, you must convert that currency into PLN. You must settle the expenses incurred (for example, a toll for using a motorway, a fee for accommodation) at the average exchange rate announced by the National Bank of Poland on the day preceding the day when invoices (other proof) documenting the travel costs were issued. You must convert allowances at the average exchange rate announced by the National Bank of Poland on the day preceding the day when internal evidence was issued.

Deduction of VAT from travel expenses

You may settle VAT for business travel on general terms, as in the case of other taxable transactions. Please remember that you cannot deduct VAT from catering and accommodation expenses. You may include non-deductible VAT on accommodation in tax-deductible expenses (gross amount).

You may deduct VAT on the basis of invoices and documents regarded as invoices in accordance with the relevant legislation, i.e., inter alia, single tickets confirming travel by a toll motorway or travel over a distance of at least 50 km. The document should contain: the reference number and the date of issue, the full name or company name of the taxable person, the taxable person’s identification number for tax purposes, information that makes it possible to identify the type of services, the amount of VAT and the total amount due.

You may deduct 100% of VAT from expenses relating to the use of a passenger vehicle if you use the car exclusively for business purposes and you submit a VAT-26 form to the revenue office. The use of the car exclusively for the needs of the company is confirmed on the basis of a mileage log for VAT purposes (like that for PIT purposes).
If you do not maintain a mileage log and you use the car for both your own needs and the needs of the company, you will deduct 50% of VAT.

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