Rules governing per diem for business travel

This article answers the following questions:

What are the per diem rates for business travel?
What does accounting for business travel look like and what are employers' obligations arising from employees' business travel?

In accordance with the Polish Labour Code, employees who are on a business trip are entitled to payments to cover the expenses related to that trip. Per diem rates are determined on the basis of the so-called "business trip regulation".

We have already written about the definition of a business trip in our earlier blog post.

The Regulation of the Minister of Labour and Social Policy of 29 January 2013 on the payments due to employees of state or local government budgetary units on account of business travel (OJ of 2023, item 2190) refers directly to government employees, but it also has an impact on determining and calculating the per diem amounts for business travel for employees from the private sector.

The business trip regulation is applicable to employers from the private sector if they do not specify internal rules concerning business trip benefits in a collective agreement, remuneration policy, or directly in an employment contract.

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Per diems for domestic business trips

Employees who are on a domestic business trip (i.e. within Poland) are entitled to per diem to cover increased meal costs. The minimum per diem rate for domestic travel is currently PLN 45 for one day.

Per diem is calculated for each commenced day of business travel. If the business travel lasts less than one day, per diem is calculated according to the following rules:

for domestic business trips lasting less than 8 hours, employees are not entitled to per diem;
for domestic business trips lasting from 8 to 12 hours, employees are entitled to 50% of the full amount of per diem;
for domestic business trips lasting more than 12 hours, employees are entitled per diem in the full amount.

If the business trip lasts more than one day, employees are entitled to per diem in the full amount for each day. In addition, for each commenced but incomplete day, employees are entitled to per diem in the following amount:

up to 8 hours – 50% of the full per diem amount;
more than 8 hours – per diem in the full amount.

Employees are not entitled to per diem for domestic business travel:

for the time they are posted to the place of permanent or temporary residence;
while being on a business trip lasting at least 10 days, for the time of travelling to and from the place of permanent or temporary residence on a non-working day;
if they are provided with full three meals daily free of charge.

Per diem may be reduced:

if employees are provided with one or two meals daily, per diem is reduced depending on the meals provided (if breakfast is provided, per diem is reduced by 25%, dinner by 50%, and supper by 25%)
if employees use hotel services with catering provided, per diem is reduced according to the model presented above, i.e. if the hotel service includes breakfast, per diem is reduced by 25%.

Per diem for international business trips

Employees on an international business trip are also entitled to per diem to cover increased costs of meals and other petty expenses. Per diem amounts are specified individually for each country, with the exact rates to be found in the aforementioned business trip regulation.

It is important to note that employers from the private sector cannot pay lower per diem amounts for international business trips than the per diem rates specified for particular countries in the business trip regulation.

Thus, to apply the minimum rate (currently PLN 45 for one day) for international business trips, employers from the private sector have to set out the conditions of payments made to employees on account of business travel in the collective agreement, remuneration policy, or employment contract. If the employer fails to do so, the provisions of the business trip regulation apply in this respect, also concerning the minimum per diem rates for international business trips for particular countries.

Per diem is calculated for each commenced day of business travel. For each commenced but incomplete day of business travel, the following rules of determining the per diem amount apply:

less than 8 hours – 1/3 of the full per diem amount;
from 8 to 12 hours – 1/2 of the full per diem amount;
more than 12 hours – per diem in the full amount.

Per diem for international trips may be reduced if:

employees are provided with full three meals daily free of charge (employees are then entitled to 25% of full per diem);
employees are provided with one or two meals daily (per diem is reduced depending on the meals provided: if breakfast is provided, per diem is reduced by 15%, dinner by 30%, and supper by 30%);
employees use hotel services where catering is provided. In such a case, per diem is reduced according to the model presented above, i.e. if the hotel service includes breakfast, per diem is reduced by 15%;
employees receive a payment to cover the costs of meals in an amount which is lower than that set out in legal regulations. In such a case, per diem is reduced by the amount of the payment received.

What is important to remember is the fact that per diem for business travel is exempt from personal income tax up to the amount laid down in the business trip regulation (currently PLN 45 for one day) and is not subject to social security contributions.

Such part of per diem which exceeds the amount specified in the business trip regulation is subject to tax and social security in accordance with the general rules. Importantly, the exemption from tax and social security does not apply to mobile workers, due to the fact that while carrying out their standard "field" tasks, they are not on a business trip (mobile workers are a group of employees who perform work in continuous movement, therefore, the condition of incidental nature is not met, and their journeys cannot be deemed as business trips within the meaning of labour law).

In order to correctly account for business trips, it is crucial to accurately calculate the per diem amounts to which employees are entitled. Feel free to contact our experienced advisors who will be happy to support you in this area.