How to Negotiate Expense Reimbursement
While the reimbursement of employee business expenses might seem a straightforward matter needing little negotiation, it is an extremely important item for some employees whose positions require significant travel, entertainment, research or presentation expenses. If you fit one of these categories it behooves you to negotiate these business expense reimbursement issues during the hiring process.
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Instructions
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Negotiate Expense Reimbursement Based on Your Job Requirements
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Review with your employer all expectations regarding your travel and entertainment requirements in your new position once it is clear you will be offered the job. These should include amount of travel time, accommodations, entertainment and any use of your own automobile or other assets.
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Include the cost of being "connected" when you negotiate reimbursement of business expenses. These may include cell and data contracts, online and wireless charges and the cost of wireless hardware accessories. Be prepared to pay income tax to reflect any personal use of equipment purchased by your company.
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Negotiate your access to a company credit card, with a credit line commensurate with your likely expense range. Have it automatically track and classify your expenses so as to reduce your paperwork and free you from having to meet major travel, entertainment and other business expenses out of pocket.
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Request travel and entertainment advances if you will not have a company credit card or if some expenses cannot be placed on your company credit card.
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Research and negotiate the going rate for mileage reimbursement if you will be using your own automobile for business purposes. The IRS mileage rate ordinarily increases by several cents per year and is a good rule of thumb.
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Negotiate access to a leased or purchased company car if you anticipate that it would benefit you given the mileage you will be incurring, but be prepared to pay incomes tax to reflect any personal use of a company vehicle.
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Clarify the extent to which you may be required to purchase books, journals, subscriptions or memberships and include these when you negotiate reimbursement of business expenses.
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Download and use IRS Form 2106 (Employee Business Expenses) both as a guide to which expenses should be covered by your employer and to help you organize and maintain your documentation (see Resources below).
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Tips & Warnings
For certain executive positions you may be able to negotiate employer reimbursement of expenses, such as club and spa memberships. Be clear with your accountant about whether you may have tax liability for some or all of these costs.
Keep your own records even after you negotiate your employer's responsibility for various expenses and turn in your documentation. When your employer reimburses you for documented business expenses it is your employer's responsibility to maintain the receipt files, but keeping your own copies may protect you from having the payments construed as income if you are audited several years into the future.
