By adopting certain IRS code sections, the reimbursements made to your employees for travel and entertainment expenses will not be considered additional compensation. This will save the company employment taxes such as FICA, FUTA and unemployment. For employees this arrangment will not include the reimbursements on their W-2 statement.
The Company must adopt the plan which requires: a reasonable accounting by the employee for the expenses reimbursed; a business reason for the expenses; repayment of an excess reimbursements by the employee within a reasonable time. More detail is listed in IRS publication 463.
