Getting Familiar With The Employee Expense Regulations As Applicable In Germany

Overseas business organizations operating in Germany, might often require their employees to travel within and outside the country.  As in most other countries, such travel is governed by specific expense reimbursement regulations of the local government. It is the responsibility of a PEO company Germany to make its foreign-based clients aware of the various rules governing per diems. Per diems refer to the fixed amount of money that the employers are expected to reimburse their traveling employees with, while they are away on a business assignment. The German expense reimbursement regulation is divided into two main categories, which are explained in brief as follows.

Multi-day Trips Within The Country : Employees, who are required to undertake multiple day trips within Germany, are entitled to a reimbursement amount of €24, for every 24 hours they spend away from their home or workplace. In addition, the employers are also required to pay them €12, for their day of departure and arrival, if the employees would not be spending the night at their own home. In the case of single-day trips, where the employees spend more than 8 hours away from home, they are entitled to a reimbursement amount of €12.

Trips Outside Germany : The regulations governing reimbursement for trips away from Germany are somewhat complicated. This is because the rate of reimbursement is decided by the government on the basis of the country that the employees will be traveling to as well as the cost of living within that country. The government generally offers three different expense reimbursement rates according to the destination country. These include rates as applicable for a 24-hour absence from home or workplace, the rates for the day of arrival and departure and the rates related to the costs of an overnight stay in the destination country.

Meal Allowance Deductions

The expense reimbursement regulations also cover the meal allowances provided to the employees during their business-related travel. However, the Employer of Record Germany should inform their clients about the situations where the meals offered to the employees are free of cost. In such situations, a certain percentage is deducted from the daily meal allowance of the employees for such cost-free meals. The deductible percentages are set at 20% for breakfast and 40%  deduction for lunch and dinner.

Other Expense Regulations To Consider

It is important for overseas employers to understand that a majority of expenses vary in accordance with the travel destination of the employees. The employers may also have to reimburse the employees for various other expenses including car rentals at the destination, any expenses on business communications such as phone calls, letters, etc., as well as transportation, storage and in some cases the insurance for luggage. The most important thing that a PEO Germany needs to ensure is that they make the navigation compliance of German expense regulations easy for their clients. Most professional PEO’s are capable of mitigating the various compliance risks by taking proper care of all the associated administrative tasks in a timely and efficient manner. This is, in fact, one of the most basic requirements for ensuring the successful expansion and operation of overseas business organizations within Germany.