Travel Policy > Combining Business and Personal Travel
General Guidelines
Documentation Required
Car Rental Involving Personal Use
Extended Stay to Save Airfare
Taxability of International Travel with Personal Use
Illustrations of Combined Business and Personal Travel Issues
A common example would be the use of a rental car for travel between the airport and hotel at one's destination. In the case of just one traveler, shuttle service or taxi may be more economical, especially when one considers the cost of parking the car at the hotel. With a larger party traveling as a group, then a rental car might be cheaper than the sum of the individual shuttle fares. When the need for the car is not self evident, the traveler must explain the rationale and be aware that a portion of the car rental may be classified as a personal expense.
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For the purposes of calculating the percentage of business and personal time when a travel day consists of both business and personal time, the day would be classified as a business day. For purposes of this policy, sabbaticals are treated as business. For more information, review the following examples:
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Standard Business Trip - no personal elements
Travel by air from State College to Chicago for three-night stay
Depart from State College on Sunday at 9:00 a.m., return Wednesday at 9:00 p.m.
All expenses are eligible for reimbursement:
Standard Business Trip - Saturday night stay to reduce airfare, no personal elements
Travel by air from State College to Chicago for four-night stay
Depart from State College on Saturday at 9:00 a.m., return Wednesday at 9:00 p.m.
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All expenses are eligible for reimbursement:
Saturday night stay to reduce airfare, with extended stay for personal reasons, includes car rental
Travel by air from State College to Chicago for six-night stay (Thursday and Friday are personal)
Depart from State College on Saturday at 9:00 a.m., return Friday at 9:00 p.m. (if on business only, would return Wednesday at 9:00 p.m.)
Business expenses eligible for reimbursement:
Personal expenses not eligible for reimbursement:
Travel by air from State College to Chicago for four-night stay, then continue to Denver for four-night personal stay
Depart from State College on Saturday at 9:00 a.m., return a week later on Sunday at 9:00 p.m.
To determine portion of airfare that is personal, must know the cost of airfare for the business portion of trip to Chicago and return. The total airfare is $750, and the business portion is $350. (If on business only, would return Wednesday at 9:00 p.m.)
Business expenses eligible for reimbursement:
Personal expenses not eligible for reimbursement:
Travel by air from State College to Chicago for four-night stay, then continue to Denver for four-night personal stay
Depart from State College on Saturday at 9:00 a.m., return a week later on Sunday at 9:00 p.m. (If on business only, would return Wednesday at 9:00 p.m.)
In a peculiar twist of pricing, airfare can be found that results in total airfare of $300 to include the entire trip.
Since this price is less than the stand-alone pricing for airfare to Chicago and back, the entire $300 is permitted as a business expense.
Business expenses eligible for reimbursement:
Personal expenses not eligible for reimbursement:
Combining Business and Personal Travel
General Guidelines
Documentation Required
Car Rental Involving Personal Use
Extended Stay to Save Airfare
Taxability of International Travel with Personal Use
Illustrations of Combined Business and Personal Travel Issues
General Guidelines
A traveler may be reimbursed for uninterrupted business travel by the most direct route. When a traveler interrupts travel or deviates from the direct route for personal reasons, a reimbursement may not exceed the cost of the most direct route. If the traveler extends the duration of the trip for nonbusiness reasons and the alternate rate is lower than the direct rate for the comparable period, the reimbursement shall be for the lower rate. It is possible that the traveler may combine personal travel with a business trip that would reduce the overall cost to the University. This is acceptable provided the University's cost is not more than the business portion alone. In the event the traveler leaves the business destination, the University will not pay any expenses at the personal destination.Documentation Required
The traveler is responsible for documentation to prove that any personal travel did not result in additional costs for the University. The traveler must provide comparable price quotes from either Travel Services Online or from one of the contract travel agencies to document the difference in cost. The comparable quote must be obtained at the same time that the travel reservation is booked. This comparison is necessary to ensure University expenditures comply with federal travel regulations. The documentation must accompany the request for travel settlement. Failure to follow this procedure will require review by the Corporate Controller, which may delay reimbursement and may result in denial of the claim.Car Rental Involving Personal Use
To be eligible for reimbursement, a rental vehicle must be required for business purposes or be an economical choice to meet business needs. If the personal use of the rental vehicle incurs costs greater than that required for business purposes, the additional cost will be the responsibility of the traveler and will not be reimbursed by the University. To determine the appropriate cost sharing, the traveler should submit price quotes for the cost of car rental for the business portion only. Any rental costs in excess of the quote for business days will be paid by the traveler. If no price quotes are provided for the business portion alone, then the cost will be prorated by day, with only the cost per business day eligible for reimbursement.A common example would be the use of a rental car for travel between the airport and hotel at one's destination. In the case of just one traveler, shuttle service or taxi may be more economical, especially when one considers the cost of parking the car at the hotel. With a larger party traveling as a group, then a rental car might be cheaper than the sum of the individual shuttle fares. When the need for the car is not self evident, the traveler must explain the rationale and be aware that a portion of the car rental may be classified as a personal expense.
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Extended Stay to Save Airfare
It is sometimes possible to save airfare by scheduling an additional night's stay in one's travel itinerary. When compared to a normal schedule for the business purpose of the trip, if the documented savings in airfare offsets the increased cost of the trip to be incurred by the University, then the extended stay is acceptable. If the extended stay will not incur additional lodging, meal, or other expense to the University and the airfare is equal to or less than the normal schedule for business purposes, this is also acceptable. If the trip extends beyond the requirements for the business purpose and airfare savings do not compensate for the extension, then the additional expense of the extended trip is not allowable for reimbursement. The traveler may still select to include the personal aspect of the trip, but must assume the additional expense as personal.Taxability of International Travel with Personal Use
International travel frequently consists of both business and personal components. According to the IRS, there is a taxability issue if BOTH of the following conditions are met:- The total period of the trip is longer than one week, and
- At least 25 percent of the trip is personal
For the purposes of calculating the percentage of business and personal time when a travel day consists of both business and personal time, the day would be classified as a business day. For purposes of this policy, sabbaticals are treated as business. For more information, review the following examples:
Trip with Taxable Element
An employee travels to London for 10 days, of which 7 days are business related and 3 days are personal; 70 percent of the trip is business and 30 percent is personal. The traveler is reimbursed for airfare and seven days of meals and lodging. The other three days of meals and lodging are considered personal and are not reimbursed. Since the trip was longer than one week and at least 25 percent personal, the employee will be taxed on 30 percent of the airfare considered personal under IRS regulations.Trip with No Taxable Element
An employee travels to London for 10 days, of which 8 days are business related and 2 days are personal; 80 percent of the trip is business and 20 percent is personal. The traveler is reimbursed for airfare and eight days of meals and lodging. The other two days of meals and lodging are considered personal and are not reimbursed. The cost of airfare, even though it is reimbursed to the traveler, is not taxable to the traveler since the personal component is not equal to or greater than 25 percent of the trip.Top
Illustrations of Combined Business and Personal Travel Issues
Standard Business Trip - no personal elements
Travel by air from State College to Chicago for three-night stay
Depart from State College on Sunday at 9:00 a.m., return Wednesday at 9:00 p.m.
All expenses are eligible for reimbursement:
| $ | 600 | Airfare (lowest available commercial economy fare that meets the business purpose of the trip) |
| $ | 300 | Lodging - three nights (Sunday, Monday, Tuesday) (assume $100 per night) |
| $ | 200 | Meals - four days per diem (Sunday, Monday, Tuesday, Wednesday) (assume $50 is the daily per diem) |
| $ | 50 | Ground transport in Chicago |
| $ | 80 | Airport parking in State College (assume $20 per day for four days) |
| $ | 20 | Maximum reimbursement for miscellaneous expenses |
| $ | 1,250 |
Standard Business Trip - Saturday night stay to reduce airfare, no personal elements
Travel by air from State College to Chicago for four-night stay
Depart from State College on Saturday at 9:00 a.m., return Wednesday at 9:00 p.m.
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All expenses are eligible for reimbursement:
| $ | 350 | Airfare (lowest available commercial economy fare that meets the business purpose of the trip) |
| $ | 400 | Lodging - four nights (Saturday, Sunday, Monday, Tuesday) (assume $100 per night) |
| $ | 250 | Meals - five days per diem (Saturday, Sunday, Monday, Tuesday, Wednesday) (assume $50 is the daily per diem) |
| $ | 50 | Ground transport in Chicago |
| $ | 100 | Airport parking in State College (assume $20 per day for five days) |
| $ | 25 | Maximum reimbursement for miscellaneous expenses |
| $ | 1,175 |
Saturday night stay to reduce airfare, with extended stay for personal reasons, includes car rental
Travel by air from State College to Chicago for six-night stay (Thursday and Friday are personal)
Depart from State College on Saturday at 9:00 a.m., return Friday at 9:00 p.m. (if on business only, would return Wednesday at 9:00 p.m.)
Business expenses eligible for reimbursement:
| $ | 350 | Airfare (lowest available commercial economy fare that meets the business purpose of the trip) |
| $ | 400 | Lodging - four nights (Saturday, Sunday, Monday, Tuesday) (assume $100 per night) |
| $ | 250 | Meals - five days per diem (Saturday, Sunday, Monday, Tuesday, Wednesday) (assume $50 is the daily per diem) |
| $ | 50 | Ground transport for business purposes in Chicago |
| $ | 100 | Airport parking in State College (assume $20 per day for five days) |
| $ | 25 | Maximum reimbursement for miscellaneous expenses |
| $ | 1,175 |
Personal expenses not eligible for reimbursement:
- No lodging for Wednesday or Thursday nights
- No meals for Thursday or Friday
- Car rental in Chicago - if car is rented, then the $50 that would be incurred for ground transport could be applied to cost - balance of car rental is personal
- No airport parking in State College in excess of that charged for Saturday through Wednesday
- No miscellaneous expenses for Thursday or Friday
Travel by air from State College to Chicago for four-night stay, then continue to Denver for four-night personal stay
Depart from State College on Saturday at 9:00 a.m., return a week later on Sunday at 9:00 p.m.
To determine portion of airfare that is personal, must know the cost of airfare for the business portion of trip to Chicago and return. The total airfare is $750, and the business portion is $350. (If on business only, would return Wednesday at 9:00 p.m.)
Business expenses eligible for reimbursement:
| $ | 350 | Airfare (is less than other airfares for the business portion of trip only) |
| $ | 400 | Lodging - four nights (Saturday, Sunday, Monday, Tuesday) (assume $100 per night) |
| $ | 250 | Meals - five days per diem (Saturday, Sunday, Monday, Tuesday, Wednesday) (assume $50 is the daily per diem) |
| $ | 50 | Ground transport in Chicago |
| $ | 100 | Airport parking in State College (assume $20 per day for five days) |
| $ | 25 | Maximum reimbursement for miscellaneous expenses |
| $ | 1,175 |
Personal expenses not eligible for reimbursement:
- Additional airfare of $400 for routing from Chicago to Denver is personal expense
- No lodging for Wednesday, Thursday, Friday, or Saturday nights
- No meals for Thursday, Friday, Saturday, or Sunday
- Car rental in Chicago - if car is rented, then the $50 that would be incurred for ground transport could be applied to cost - balance of car rental is personal if not needed for business portion of trip
- Car rental and parking in Denver - entirely a personal expense
- No airport parking in State College in excess of that charged for Saturday through Wednesday
- No miscellaneous expenses for Thursday, Friday, Saturday, or Sunday
Travel by air from State College to Chicago for four-night stay, then continue to Denver for four-night personal stay
Depart from State College on Saturday at 9:00 a.m., return a week later on Sunday at 9:00 p.m. (If on business only, would return Wednesday at 9:00 p.m.)
In a peculiar twist of pricing, airfare can be found that results in total airfare of $300 to include the entire trip.
Since this price is less than the stand-alone pricing for airfare to Chicago and back, the entire $300 is permitted as a business expense.
Business expenses eligible for reimbursement:
| $ | 300 | Airfare (is less than other airfares for the business portion of trip only) |
| $ | 400 | Lodging - four nights (Saturday, Sunday, Monday, Tuesday) (assume $100 per night) |
| $ | 250 | Meals - five days per diem (Saturday, Sunday, Monday, Tuesday, Wednesday) (assume $50 is the daily per diem) |
| $ | 50 | Ground transport |
| $ | 100 | Airport parking in State College (assume $20 per day for five days) |
| $ | 25 | Maximum reimbursement for miscellaneous expenses |
| $ | 1,125 |
Personal expenses not eligible for reimbursement:
- No personal cost for airfare in this scenario
- No lodging for Wednesday, Thursday, Friday, or Saturday nights
- No meals for Thursday, Friday, Saturday, or Sunday
- Car rental in Chicago - if car is rented, then the $50 that would be incurred for ground transport could be applied to cost - balance of car rental is personal if not needed for business portion of trip
- Car rental and parking in Denver - entirely a personal expense
- No airport parking in State College in excess of that charged for Saturday through Wednesday
- No miscellaneous expenses for Thursday, Friday, Saturday, or Sunday