Work-related expenses are expenses related to employees in the context of their professional activity and are generally reimbursed by the employer. These reimbursements are largely subject to the provision of expense receipts. With the company’s agreement, they may take the form of a flat-rate deduction. Work-related expenses are not included when calculating National Insurance contributions.
Where expense items fall under a flat rate of reimbursement, they will require approval by the employer, who may choose to pay you an allowance. This payment can only be made by comparing the allowance amount with the exemption ceiling. These exemptions are reassessed each year according to the following:
- Meal costs in the event of unexpected delays
- Meal costs at the workplace or outside the company
- Mileage costs
- Expenses for travel abroad
Reimbursement of work-related expenses: the different possible scenarios
If reimbursements exceed the exemption ceiling, there are two possible scenarios:
- Excesses are reincorporated into the contributions as these could be considered additional compensation
- If this is evidenced by supporting documentation, the excess is then excluded from the contributions.
Please note that the reimbursement of expenses on a flat-rate allowance basis is not applicable to management. Indeed, managers are subject to National Insurance for non-employees. The same applies to minority shareholder managers.
Only mileage costs are included in the flat-rate allowance. It is worth noting that in this instance, a manager must use his/her personal vehicle for professional purposes.
Reimbursement of work-related expenses
Some work-related expenses can only be included in the allowance if they were actually incurred, such as:
- Expenses incurred during remote working
- Expenses incurred for the professional use of communication and information tools resulting from new technologies
- Expenses incurred in the event of relocation for occupational mobility reasons
- Expenses incurred by employees of companies abroad
- Expenses related to employees moving abroad
If reimbursement on the basis of a flat-rate allowance is accepted by the company, the employer is free to decide whether to reimburse expenses following the submission of supporting documents.
Some reimbursements may be excluded from the calculation of contributions if the company can prove that the employee was obliged to incur additional costs solely due to their professional activity. An expenses receipt is therefore necessary and, in this case, there is no exemption limit.
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