Travel Pay: Handling it Correctly

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Navigating the complexities of travel pay is crucial for ensuring payroll compliance and avoiding costly penalties. This comprehensive webinar explores the intricate rules and regulations governing employee travel pay, focusing on what qualifies as travel pay, how to calculate it correctly, and how it impacts overtime. Attendees will gain insights into state-specific requirements and learn best practices for handling payments to stay in line with both federal and state wage and hour laws.

In addition to Department of Labor (DOL) compliance, the session will delve into IRS guidelines on taxing travel expenses, including the differences between per diem and accountable plan methods. As travel-related payroll compliance becomes an increasing concern for organizations, especially in multi-state operations, this webinar offers essential strategies to minimize legal risks and ensure employees are fairly and accurately compensated.

Topics Covered:
  • Travel pay requirements and compliance essentials
  • Best practices and common pitfalls in paying travel pay
  • Payroll compliance strategies for federal and state law conflicts
  • Travel pay implications for overtime
  • Understanding per diem payments
  • IRS rules on taxable travel reimbursements
  • Managing accountable and non-accountable plans
Your Benefits for Attending:
  • Understand federal and state travel pay requirements, including what must be paid and why.
  • Identify best practices for managing travel pay to ensure compliance and minimize wage and hour claims.
  • Learn how to handle complex scenarios such as multiple state regulations and special circumstances requiring travel pay.
  • Discover how travel pay affects overtime for both exempt and non-exempt employees.
  • Gain clarity on IRS taxation rules for travel payments, including per diems and accountable vs. non-accountable plans.

Attending this webinar empowers you with the knowledge to implement compliant, efficient travel pay processes, reducing risk and enhancing payroll accuracy.

Who Can Benefit:
  • Payroll Executives, Managers, Administrators, Professionals, Practitioners, Entry-Level Personnel
  • Human Resources Executives, Managers, and Administrators
  • Accounting Personnel
  • Business Owners, Executive Officers, Operations and Departmental Managers
  • Lawmakers and Legal Professionals
  • Any individual or organization dealing with payroll compliance challenges
Level: Basic
Format: Group Internet Based
Instructional Method: Live Webcast
NASBA Field of Study: Taxes (2 hours)
Program Prerequisites: None
Advance Preparation: No
  1. Introduction
  2. Our Focus For Today 00:01:03
  3. Federal DOL Requirements 00:01:56
  4. Travel Pay Under FLSA 00:02:07
  5. Preliminaries 00:03:35
  6. Preliminaries Continued 00:06:45
  7. General Principles Involved 00:08:39
  8. And It Reads 00:09:59
  9. Thus 00:11:00
  10. However 00:12:00
  11. Home to Work Ordinary Situation 00:16:55
  12. Home to Work—Emergency Situations 00:21:07
  13. No We Don’t 00:23:06
  14. However 00:24:41
  15. Opinion Letters Are Useful Here 00:25:43
  16. Opinion Letters Are Useful Here Cont’d 00:27:52
  17. Opinion Letters Are Useful Here Cont’d 00:28:29
  18. Administrative Letter 00:29:01
  19. Non-Administrative Letter 00:29:23
  20. Field Operations Handbook (FOH) 00:30:36
  21. Field Operations Handbook -  Chapters 10-64 00:
  22. Home to Work on Special One-Day Assignments in Another City 00:31:36
  23. Special One Day Assignment 00:32:16
  24. DOL Would Say 00:37:07
  25. However 00:38:09
  26. Travel That’s All in a Day’s Work 00:38:36
  27. But if 00:38:57
  28. Travel Away From Home Community 00:42:27
  29. But What if Not Normal Working Hours? 00:45:34
  30. Enforcement Policy by DOL 00:46:19
  31. Example 00:47:16
  32. Traveling by Car 00:48:01
  33. Example 00:49:02
  34. Traveling and Working 00:50:14
  35. Overnight Travel 00:53:00
  36. Van Pool Drivers 00:54:04
  37. Vanpools 00:54:36
  38. Payroll Needs a Written Policy 00:57:47
  39. Yes, You Can Pay Differently 00:58:57
  40. Travel Pay and Overtime 00:59:57
  41. State Watch for Travel Pay 01:06:02
  42. California—But of Course 01:07:20
  43. California 01:08:21
  44. Example 01:08:33
  45. California - Ride Share 01:10:04
  46. California - Compulsory Travel Time 01:10:37
  47. Arkansas 01:11:39
  48. Iowa 01:12:31
  49. Other States - Colorado and New Jersey 01:13:10
  50. Other States -New York and Vermont 01:13:30
  51. Travel Pay by State 01:15:16
  52. What are the IRS Requirements for Taxing and Reporting Travel Reimbursements 01:17:34
  53. Travel Pay Reimbursements Under The IRS 01:17:39
  54. Per Diems 01:18:26
  55. Per Diems -  Meals and Lodging 01:19:06
  56. GSA.gov 01:20:16
  57. GSA.gov Cont’d 01:20:15
  58. Auto Reimbursements 01:20:30
  59. GSA.gov - CONUS 01:21:11
  60. GSA.gov - How To Search 01:21:37
  61. GSA.gov - Example 01:21:44
  62. Per Diem and Taxes 01:22:15
  63. Per Diem and Taxes - Business Report 01:22:27
  64. Mileage Per Diems 01:22:44
  65. Mileage Per Diems - FIT, FICA, and FUTA 01:22:55
  66. Accountable Plan Example 01:23:11
  67. Accountable Plan 01:25:33
  68. Nonaccountable Plan 01:25:48
  69. Payments are Under a Nonaccountable Plan if 01:27:54
  70. When Does Payroll Become Involved? 01:28:43
  71. Auto Allowances 01:29:59
  72. Business Use Personal Vehicle 01:30:55
  73. Nontaxable 01:32:56
  74. Business Use Personal Vehicle - Example 1 01:33:30
  75. Partly Taxable 01:34:12
  76. Business Use Personal Vehicle - Example 2 01:34:48
  77. Totally Taxable 01:35:32
  78. Final Questions 01:36:10
  79. Presentation Closing 01:53:42
  • Vicki M. Lambert, CPP

    Vicki M. Lambert, CPP

    Vicki M. Lambert, CPP, is President and Academic Director of The Payroll Advisor™, a firm specializing in payroll education and training. The company offers a payroll news service which keeps payroll professionals up-to-date on the latest rules and regulations.With over 35 years of hands-on experi [...]

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  • Accountable Plan 01:20:37, 01:23:16, 01:28:57, 01:31:35
  • Audit 00:31:13, 00:38:54
  • Department of Labor (DOL) 00:01:41, 00:23:12, 00:25:47, 00:49:16
  • Exempt 00:03:14, 00:07:18, 00:48:3
  • Expense 00:12:06, 01:23:32
  • Expense Report 01:20:45, 01:22:22
  • Fair Labor Standards Act (FLSA) 00:02:08, 00:09:46, 00:26:26
  • Federal Insurance Contributions Act (FICA) 01:22:29:
  • Federal Unemployment Tax Act (FUTA) 01:23:00
  • Field Operations Handbook 00:
  • Form W-2 01:23:11
  • General Services Administration (GSA) 01:19:10, 01:29:01
  • Minimum Wage 00:02:19, 00:06:56
  • Non-Exempt 00:48:01
  • Overtime 00:02:20, 00:06:57, 00:58:56
  • P-Card - 01:26:40
  • Per Diem 01:18:28, 01:20:33, 01:28:52
  • Portal-to-Portal Act 00:09:46, 00:26:27
  • Regular Rate of Pay 01:03:42
  • Travel Pay 00:00:05, 00:01:24, 00:03:24, 00:25:57, 01:00:00, 01:06:12, 01:18:25
  • Wage 00:01:36, 00:08:24, 00:27:58, 01:07:27, 01:13:26, 01:17:45, 01:22:17

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Department of Labor (DOL): The United States Department of Labor is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services, and some economic statistics; many U.S. states also have such departments.

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Expense: Offset (an item of expenditure) as an expense against taxable income.

Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)

Expense Report: A report that tracks expenses incurred during the course of performing necessary job functions. Examples include charges for gas, meals, parking or lodging. If your employees spend a lot of money in cash, you need to make sure you have them list these expenditures on an expense report form.

Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".

Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.

Field Operations Handbook: The Field Operations Handbook (FOH) is an operations manual that provides Wage and Hour Division (WHD) investigators and staff with interpretations of statutory provisions, procedures for conducting investigations, and general administrative guidance. The FOH was developed by the WHD under the general authority to administer laws that the agency is charged with enforcing. The FOH reflects policies established through changes in legislation, regulations, significant court decisions, and the decisions and opinions of the WHD Administrator. It is not used as a device for establishing interpretative policy.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

General Services Administration (GSA): The General Services Administration is an independent agency of the United States government established in 1949 to help manage and support the basic functioning of federal agencies.

Minimum Wage: The lowest wage paid or permitted to be paid specifically fixed by a legal authority or by contract as the least that may be paid either to employed persons generally or to a particular category of employed persons.

Non-Exempt: Non-exempt employees are workers who are entitled to earn the federal minimum wage for every hour they work. Such workers likewise qualify for overtime pay, which is calculated as one-and-a-half times their hourly rate, for every hour they work, above and beyond a standard 40-hour workweek.

Overtime: Overtime is time and a half of what an employee earns for every hour worked over 40 in a workweek. The FLSA salary threshold is the minimum salary employers must pay employees for them to be exempt from overtime wages.

P-Card: A PURCHASING CARD (also abbreviated as PCard or P-Card) is a form of company charge card that allows goods and services to be procured without using a traditional purchasing process. In the UK, purchasing cards are usually referred to as procurement cards

Per Diem: (Latin for "per day" or "for each day") or daily allowance is a specific amount of money an organization gives an individual, often an employee, per day to cover living expenses when traveling for work. - Wikipedia (https://en.wikipedia.org)

Portal-to-Portal Act: An amendment to the Fair Labor Standards Act (FLSA) clarifying that certain activities are generally not compensable working time under the FLSA. The Portal-to-Portal Act provides that employers are not required to pay for the time employees spend on activities or traveling occurring before or after they perform the principal activities for which they are employed.

Regular Rate of Pay: An employee’s regular rate is the hourly rate an employee is paid for all non-overtime hours worked in a workweek. When calculating an employee’s regular rate, all compensation received by the employee in a workweek must be included, including wages, bonuses, commissions, and any other forms of compensation.

Travel Pay: Travel Pay is payment for expenses employees spend traveling for work-related activities. This could include airfare, trainfare, gas and milegae, and meals.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

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Webinar Survey Overall Rating

This webinar received a total of 4 survey responses. Attendees have given an average rating of 4.2 stars out of a possible 5, reflecting the quality and value of the content presented.

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Reviews From Webinar Survey

Our webinars are crafted to deliver exceptional value and insight to business professionals. Below, you'll find genuine feedback from attendees.

Jessica B.
August 22, 2025
4.0 / 5
Webinar Rating:
4.0 Stars
Speaker Rating:
4.0 Stars
Do you have any other comments, questions or concerns?
It would be helpful if when answering a poll question that is a "knowledge check" of the material to provide the correct answer. Also, there is always minimal time for Q&A at the end of the session, and the total time runs over the scheduled time. When on a tight schedule this makes things difficult if you are waiting for the answer to your question or just want to listen and learn to what others had questions on.
Gina A.
August 21, 2025
3.2 / 5
Webinar Rating:
3.3 Stars
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The presenter kept the meeting interesting; I would like to have seen the poll results. The final topics were rushed,
Angela J.
August 21, 2025
5.0 / 5
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Vicki knows her stuff, always very informative. Thank you
Joy F.
August 21, 2025
4.4 / 5
Webinar Rating:
4.7 Stars
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Do you have any other comments, questions or concerns?
The question and answer part went over time. I am stayed on, but want to know if in the future it goes over the stated time can I leave and still get credit? I am grateful that the speaker answered all the questions, but I was in a time crunch. Maybe this seminar should be shorter to allow for questions as there were a bunch

Frequently Asked Questions

Travel pay has direct implications for overtime calculations under the Fair Labor Standards Act, and mishandling this intersection is one of the most common payroll compliance errors organizations make. When travel time is compensable—such as travel during normal working hours, special one-day assignments to another city, or overnight travel during regular work hours—those hours must be included in the employee's total workweek hours for overtime purposes. If compensable travel hours push an employee over 40 hours in a workweek, overtime at one and one-half times the regular rate of pay is triggered. The regular rate of pay calculation itself must include all compensation paid in the workweek, which can include travel allowances if they are not properly excluded. Different pay rates for travel time versus productive work time are permissible under certain conditions but require careful documentation. State laws may impose even stricter requirements than the FLSA. Aurora Training Advantage's Travel Pay: Handling it Correctly webinar with Vicki Lambert, CPP, covers the overtime implications of travel pay with practical examples and state-by-state compliance guidance.
The distinction between accountable and non-accountable plans for travel reimbursements is critical for payroll tax compliance and affects how reimbursements are treated for federal income tax, FICA, and FUTA purposes. An accountable plan meets three IRS requirements: the expense must have a business connection, the employee must adequately account for the expense with documentation such as receipts or expense reports, and any excess reimbursement must be returned to the employer within a reasonable time. Reimbursements made under a qualifying accountable plan are excluded from the employee's taxable income and are not subject to payroll taxes. A non-accountable plan fails to meet one or more of these requirements—for example, if employees receive flat allowances without submitting receipts or if excess amounts are not returned. Non-accountable plan payments are fully taxable as wages, subject to income tax withholding, FICA, and FUTA, and must be included on the employee's W-2. Aurora Training Advantage's Travel Pay: Handling it Correctly webinar with Vicki Lambert, CPP, provides detailed guidance on structuring compliant reimbursement plans.
Per diem payments are fixed daily allowances employers provide employees to cover lodging, meals, and incidental expenses while traveling for business, offering a simplified alternative to reimbursing actual expenses. The IRS sets per diem rates for locations throughout the United States via the General Services Administration (GSA), with higher rates for expensive cities and lower rates for less costly destinations. When employers pay per diems at or below the GSA federal per diem rate, the payments are treated as made under an accountable plan and are not subject to income tax withholding or payroll taxes—provided the employee is traveling away from home on business and the employer maintains basic documentation. Per diems paid above the federal rate result in the excess being treated as taxable wages. Mileage reimbursements follow a similar structure using the IRS standard mileage rate. Per diems simplify administration significantly by eliminating the need to track and verify every meal and lodging receipt. Aurora Training Advantage's Travel Pay: Handling it Correctly webinar with Vicki Lambert, CPP, walks through GSA rate lookups, per diem taxation rules, and practical payroll compliance strategies.
While the Fair Labor Standards Act establishes the federal floor for travel pay requirements, many states have enacted more protective laws that expand employer obligations beyond federal minimums—and non-compliance with state requirements is an increasingly common source of wage claims and class action litigation. California is the most well-known example, with unique rules on commute time, ride-share arrangements, and compulsory travel time that differ substantially from FLSA standards. States including Arkansas, Iowa, Colorado, New Jersey, New York, and Vermont also have specific travel pay rules that employers operating in those states must understand. For employers with employees in multiple states, navigating conflicting federal and state requirements requires careful analysis of which standard applies and when. Multi-state payroll operations should document their travel pay policies by state and review them periodically as state wage and hour laws continue to evolve. Failure to comply with state-specific requirements can result in back wages, penalties, and costly litigation. Aurora Training Advantage's Travel Pay: Handling it Correctly webinar with Vicki Lambert, CPP, provides a state-by-state travel pay overview for payroll and HR professionals.
Travel pay compliance errors are among the most frequent drivers of Department of Labor audits and wage claims, yet many organizations are unaware of their exposure. The most common mistake is failing to pay for compensable travel time—particularly travel on special one-day assignments to another city, travel during normal working hours on weekends, and travel that qualifies as part of the employee's principal work activity. Treating all commuting time as non-compensable without analyzing whether the Portal-to-Portal Act exclusions apply is another frequent error. Using non-accountable plan reimbursements without properly taxing them as wages can create significant IRS liability. Overlooking state-specific travel pay requirements is particularly costly for multi-state employers. Failing to include compensable travel hours in overtime calculations is another common payroll error with compounding financial consequences over time. Finally, having no written travel pay policy leaves organizations unable to demonstrate a consistent, good-faith compliance approach if audited. Aurora Training Advantage's Travel Pay: Handling it Correctly webinar with Vicki Lambert, CPP, addresses all of these pitfalls with clear guidance and practical corrective strategies.