How to manage tax-free per diems with Intempus

The rules for tax-free per diems and travel allowances can be complicated to make sense of. Here we provide an overview of the rules and their purpose. We'll also show you how you can easily and simply manage tax-free per diems with a time tracking system like Intempus.

The rules on tax-free per diems - also known as travel allowances - are full of information and nuances. But overall, it's a really good set of rules that make it easier and, not least, more flexible to run a business. You can learn more about the rules here.

What does ‘tax-free per diems’ mean?

Per diems are for those who carry out their work in a geographical location where they incur extra costs for food and/or accommodation. For example, a craftsman who is sent to another part of the country for a job lasting several days and therefore has to spend the night there. Obviously, accommodation and food costs should not be paid out of pocket, and employers have two options to compensate for this:

1) The employer can reimburse the employee's expenses, which requires that everything is documented with receipts.
2) Employers can pay tax-free per diems.

With tax-free per diems, the employee pays their expenses out of their own pocket, but in return receives a flat-rate, tax-free payment. This amount will typically be higher than the actual expenses, so the employee makes money while the company avoids the administrative hassle of dealing with receipts - and can deduct the per diem.

The rates for 2024 are as follows:

Remember to document your diets

As described, the purpose of the tax-free travel allowance is to save both employer and employee a lot of administrative hassle. However, you can't completely avoid having to deal with documentation in order to be allowed to make the tax-free payment. Fortunately, this is the kind of documentation you can structure and digitise.

It is the employer's responsibility to keep track of the following:

• Business purpose and milestones of the trip
• The number of business travel days
• Start and end time of the journey
• Calculation of the compensation, including the rates used

However, the number of travelling days cannot always be deduced from the start and end time of the trip. For example, a business trip can be combined with a private holiday, in which case it is important to separate the business part of the trip from the private part.

There is no standard form for checking this information, but SKAT encourages you to use the same systematic approach to reporting and calculation every time. It is the employer's responsibility to carry out the check, but any missing documentation also falls back on the employee. The allowance will no longer be tax-free if SKAT does not assess that the travel fulfils the conditions. This is an individual assessment on a case-by-case basis, so there's nothing general to say about when you're entitled to a tax-free travel allowance. However, SKAT has some excellent examples below “Examples of travelling situations”.

Use Intempus to report your journeys

Are you looking for a digital, cloud-based solution that can handle the registration of per diems? Intempus can help you.

A diet is paid based on a specific work assignment. It could be a customer, a meeting or similar. In Intempus, the per diem registration is always linked to a so-called case, which will correspond to the business purpose and sub-goals of the journey. Here you can read more Registration of diets in Intempus.

In the following, the respective things that need to be documented are discussed.

Do you often make use of tax-free per diems? And would you like to try keeping track of it all via an app? Intempus makes it easy and automatic to report per diems and other expenses - fully compliant with SKAT's requirements. Contact us for a free and binding demo to learn more about your options:

You are also welcome to give us a call at: +45 26390400