Policy handbook
Copy, edit and adopt. Adjust the limits to your own spend history before rollout.
1.0Purpose and scope
This policy covers travel and business expenses for all employees, including field staff who work on job sites away from home. It sets per diem, lodging, equipment, safety gear and mileage rules so crews are paid fairly and job costs land on the right project and cost code. It is written to meet IRS accountable plan rules. Union agreements govern where they set different travel pay.
2.0Roles and approvals
Superintendents approve their crews' expenses and confirm the job number on each line. Project managers approve superintendent expenses and any cost charged to the project's general conditions. Project accountants review coding before job cost reports run, Accounts Payable reviews every report, and the operations VP approves reports above $5,000. No one may approve their own expenses or those of their supervisor.
3.0Lodging near the job site
The company will reimburse a standard room within 30 miles of the job site up to the nightly cap, including taxes, with the itemized folio attached. For projects longer than 30 days, the project manager should arrange weekly or monthly rentals for crews. Crew members who live within 50 miles of the site drive daily and receive mileage instead of lodging.
4.0Job-site per diem
Crew members who lodge away from their tax home receive meals and incidentals per diem at the IRS high-low rate for the job locality, paid at 75% on the first and last travel days. Per diem replaces meal receipts, but each day must be recorded with date, job number and location. Per diem is not paid on days at home or when the project provides meals.
5.0Long assignments
When an employee's assignment at one job site is realistically expected to last more than one year, the site is treated as the employee's tax home, and per diem and lodging paid after that point are taxable wages. Project managers must tell payroll as soon as a schedule extension makes a one-year stay likely, so payroll can treat the payments correctly from that date forward.
6.0Equipment, small tools and rentals
Field staff may buy small tools, fasteners and consumables needed to keep work moving up to $400 per purchase on the corporate card, with the job number on the receipt. Equipment rentals above $400 go through the equipment desk, which checks whether company equipment is available. Purchased tools stay company property, and missing tools must be reported to the superintendent within 48 hours.
7.0Safety gear
Each field employee receives up to $210 per year for safety-toe boots, reimbursed with a receipt. Hard hats, high-visibility vests, gloves, eye protection and fall protection harnesses are issued by the company and replaced through the safety manager when damaged. Employees must never buy fall protection equipment on their own, because it must meet the safety program's specifications.
8.0Vehicles and mileage
Company trucks are used for site work whenever available. Personal vehicle use is reimbursed at the IRS standard mileage rate, logged by date, origin, job site and job number. Travel from home to a temporary job site is reimbursable, while travel to the regular yard or office is commuting. Tolls and parking are reimbursable. Traffic fines and parking tickets are the employee's responsibility.
9.0Alcohol, entertainment and gifts
Alcohol is never reimbursable on job-site travel. Project managers may include up to two drinks per person at meals with owners, architects or subcontractors. Entertainment requires operations VP approval and is nondeductible under the Tax Cuts and Jobs Act of 2017. Gifts are limited to $25 per recipient per year. Public project owners often restrict what their staff may accept, so check before offering anything.
10.0Trips home and personal expenses
On remote projects, the company will pay for one trip home every two weeks, or the cost of staying through the weekend if lower. Personal expenses, including companion travel, personal tools, laundry on stays under five nights and in-room entertainment, are not reimbursable. When a crew member stays extra days for personal reasons, per diem and lodging stop on the last workday.
11.0Receipts, timing and returning excess
Expenses must be submitted within 60 days after they are paid or incurred, and field staff are encouraged to submit weekly so job cost stays current. Each line needs amount, date, place, purpose and job number. Itemized receipts are required for all lodging, fuel, tools and any expense of $75 or more. Advances must be returned within 120 days after the expense is paid or incurred when unspent.
12.0Audit, pushback and exceptions
Accounts Payable reviews every report, and every flag raised by audit software is reviewed by a person, such as per diem claimed on a day the timesheet shows no site work, or the same fuel stop on two cards. The software may draft clarification requests, but finance approves each message before it is sent. Exceptions need written approval from the project manager and operations VP.
13.0Consequences
Honest mistakes, such as a missing job number, are fixed through the clarification process. Repeated violations lead to a review with the superintendent and project manager and may result in loss of card privileges decided by management. Claiming per diem for days not worked away from home, padding mileage or misusing company fuel cards is grounds for termination.
Recommended limits
| Category | Limit | Note |
|---|---|---|
| Domestic hotel (per night) | $154 within 30 miles of the job site; $212 in major metros | Projects longer than 30 days should move crews to weekly or monthly rentals. |
| Daily meals (traveling) | Per diem at the IRS high-low rate for the job locality; 75% on travel days | Paid only when the crew member lodges away from their tax home. |
| Client meal (per attendee) | $96 for owner, architect and subcontractor meals | Owner representatives on public projects may have their own gift and meal limits. |
| Domestic airfare | Economy; one trip home every two weeks on remote projects | Trip home replaces weekend per diem and lodging when cheaper. |
| Personal vehicle mileage | IRS standard mileage rate; company truck preferred | Miles from home to a temporary job site are reimbursable; miles to the regular yard are commuting. |
| Ground transport | Pickup or crew cab rental when hauling tools; compact otherwise | Fuel is reimbursed at the pump receipt with the job number. |
| Equipment and small tools | $400 per purchase on the card; rentals over that through the equipment desk | Job number on every receipt so cost hits the right cost code. |
| Safety gear and PPE | $210 per year for safety-toe boots; hard hats, vests and harnesses issued | Damaged fall protection is replaced immediately through the safety manager. |
| Alcohol | Never on job-site travel; two drinks with owner or architect meals | Topping-out events follow the project budget with operations VP approval. |
| Receipt required at | $75 (IRS threshold); every folio, fuel and tool receipt | Per diem meals need no receipts but need job numbers and dates. |
| Pre-approval required at | Any rental over $400 or any lodging over 14 nights | Project managers approve against the project's general conditions budget. |
IRS Accountable Plan clauses
Keep these in the handbook so reimbursements stay excluded from wages under IRC § 62(c) and Treas. Reg. § 1.62-2.
- A1Per diem for meals and incidentals is paid only while an employee is away from their tax home overnight, at or below the IRS high-low rate, and is substantiated by recording time, place and business purpose under Rev. Proc. 2019-48.
- A2All other expenses must be substantiated with amount, time, place and business purpose within 60 days after they are paid or incurred, meeting the fixed-date safe harbor in Treas. Reg. § 1.62-2(g)(2).
- A3Itemized documentary evidence is required for every lodging expense and any other expenditure of $75 or more, as Treas. Reg. § 1.274-5(c)(2)(iii) provides.
- A4Per diem paid for days when the employee was not traveling away from home, and advances exceeding substantiated expenses, must be returned within 120 days after the expense is paid or incurred.
- A5Amounts not substantiated or returned on time, and travel payments for assignments expected to last more than one year, are included in W-2 wages subject to income tax withholding and FICA.
Common pitfalls in construction & engineering
- Paying per diem to crew members who live near the site and sleep at home. Those payments are wages, and missing that distinction understates payroll taxes across a whole crew.
- Missing the one-year mark on long projects. Once an assignment is realistically expected to last more than a year, per diem and lodging should move to taxable wages.
- Leaving job numbers off tool and fuel receipts. A $1,284.53 rental posted to overhead instead of the project understates job cost and distorts bids.
- Letting crew members buy their own fall protection. Equipment bought outside the safety program may not meet its specifications.
- Paying a trip home and weekend per diem for the same weekend. One or the other should apply, whichever costs less.
Questions
No. Under this policy, crew members within 50 miles of the site drive daily and receive mileage for the trip from home to the temporary job site. Per diem is for crew members who lodge away from their tax home overnight. Paying per diem to people who sleep at home turns the payments into taxable wages under IRS rules.
Where a collective bargaining agreement sets subsistence or travel pay, that agreement controls for covered workers. Payroll should treat those payments based on how they are substantiated: travel pay tied to actual overnight travel can follow accountable plan rules, while flat payments not tied to travel are generally wages. The project accountant should confirm the treatment when a new agreement is signed.
Per diem continues as long as the assignment is realistically expected to last a year or less. When a schedule change makes a stay of more than a year likely, the project manager tells payroll, and payments from that point are taxable wages. The test looks at expectations at each point in time, so updating payroll promptly matters.
Yes, up to $400 per rental with the job number on the receipt. Larger rentals go through the equipment desk, which checks first whether company equipment is idle on another project. A three-day lift rental at $1,317.46 that the equipment desk could have filled from the yard is a common and avoidable cost on a project budget.