Komandirovka, or business activities that require an employee in Russia to travel outside of their regular work environment, require that all employers reimburse their employees for each expense during the trip. For some trips and employees, however, per diems may be used for both domestic and international trips—each of which offer specific daily standards. Employers with a Russian employee(s) are obliged to follow the necessary guidelines for financially supporting the employee(s) when traveling both abroad and domestically.
Steps for Employees Seeking a Russian Travel Allowance, Reimbursement
Before an employee leaves for their trip, employers are required to issue a business trip order, or prikaz o napravleniyi v komandirovku, among additional steps. The business trip order form must include the trip’s destination, purpose, and expected duration. Employees receive per diems/allowances prior to leaving for their trip. Additionally, employers must issue an advance expense report known as Form AO-1. The Form lists estimated expenses, including:
- Per diem allowance for all anticipated days of the business trip
- Allowance to cover costs of tickets if employer has not done so
- Allowance to cover lodging if the employer has not done so
Throughout the duration of the trip, the employee must record each expense next to the estimated expenses listed on the AO-1 Form. If the actual costs incurred are less than the estimated amount, the employee must return the remaining funds. If the employee’s actual expenses exceed the amount of the travel allowance, the employer is obliged to reimburse the employee for the difference. Finally, the employee is required to attach all supporting documents to the signed and completed original AO-1 Form and submit it to their employer once they have returned home. Both the AO-1 Form and T-9a Form are required.
Russian Per Diems
Per diems assist employees in covering potential additional costs. For domestic travel, employees receive 700RUB per day, while the per diem requirement for international travel is 2500RUB per day, with the travel time continuing until the employee returns home—from either domestic or international travel. These figures are applicable for each expected day of travel.
Different Corporate Per Diem Rates
Higher corporate per diems are available. However, these amounts are tax deductible in regards to a lower profit tax—but the difference between standard per diems is taxed as income for the employee who receives a higher per diem. Per diems can also be lower than the standard amount. This is rare, however; standard Russian travel allowances/per diems are already low. This is particularly applicable for employees traveling to countries that use the euro; the euro’s stronger value does not offer a favorable exchange rate with the ruble.
Travel Considerations that Impact Per Diems
No matter whether the employee is traveling domestically or internationally, the travel time continues until the employee has returned home. This includes travel between the employee’s home country airport and their home, including time spent on public transportation, in taxis, or other modes of transport. If an employee arrives home even just a few minutes after midnight, the employee receives an additional per diem for the full day. If an employee is traveling over a weekend, they are not allotted per diems for those days unless business-related activities are conducted.
Travel Reimbursement: Streamlined
Whether working with a current employee or needing to hire multiple employees in Russia who will engage in business travel, having an experienced international payroll partner on your side can help ensure all employee travel reimbursements are handled efficiently and accurately. Get in touch with Velocity Global today to learn how our global payroll services can assist your expansion efforts.