Business expenses

An employee may have to incur a number of expenses in the course of their work: travel expenses, food or accommodation costs, and expenses relating to working conditions (costs of tools, clothing, etc.). These are known as business expenses.

They should not be confused with business expenses, i.e. costs relating to the company’s business and not linked to the employee’s professional duties (e.g. expenses incurred by the employee to purchase gifts for customers, for the purpose of promoting the company).

When an employee incurs professional expenses, you must reimburse them. However, the expenses must be incurred for the purposes of the business and in the employer’s interest.

Do you have to reimburse business expenses?

The courts require you to reimburse an employee’s business expenses provided they are incurred for the purposes of the business and in your interest. If this is not the case, you may refuse to reimburse them.

An employer is not permitted to deduct business expenses from an employee’s pay. However, there is nothing to prevent you from including a clause in the employment contract stipulating that the employee bears the cost in return for the payment of a lump-sum allowance.

This lump-sum allowance must be agreed in advance and must not be disproportionate to the actual amount of the expenses incurred by the employee.

The employee’s actual remuneration for their work must remain at least equal to the minimum wage (SMIC) or the minimum rate set by collective agreement.

In principle, business expenses are fully exempt from social security contributions and income tax, or within limits set by an Order of the Minister of Finance.