Best practices for managing business travel expenses in 2026

What is a business travel expense

When employees in your company incur any travel-related business expenses, they can be categorised as business travel expenses. This includes any amount spent on meals, transportation (including airfare, trains, car rentals, taxis, or self-driven vehicles), and accommodation (in hotels, studio apartments, or Airbnb), as permitted by the company's rules.

Apart from these, other incidental or miscellaneous expenses related to business travel can also be categorised as business travel expenses and reimbursed accordingly. Knowing what constitutes business travel expenses or company travel expenses can help you create a travel expense budget to follow and reduce your costs.

What qualifies as a business travel expense

Any legitimate travel expense for business purposes explicitly outlined in your company's business travel policy can be claimed as a travel expense. The underlying aspect to keep in mind is that the expense should be business-related. According to IRAS guidelines, expenses must be wholly and exclusively incurred in the production of income to qualify for tax deduction.

Transportation

Employees should be able to claim expenses for transportation, including airfare, train tickets, bus tickets, taxi fares, and on-ground travel.

Important for Singapore companies: IRAS does not allow tax deductions on private car expenses (S-plated, Q-plated, or RU-plated cars), even if used for business. However, petrol expenses for business travel using personal vehicles may be reimbursed to employees as an allowable business expense.

Define permissible transport classes early. Set clear rules on who can book economy, premium economy, or business class. Do not leave it to discretion. State designation-based limits are upfront, so there is no ambiguity or overspending.

Meals

While on a business trip, meal costs should be considered a reimbursable expense. Having a per diem budget for each meal per person can simplify tracking. You may also choose to cover meals for clients, vendors, or colleagues.

Accommodation

If an employee has to stay overnight for business, the cost of the hotel room or Airbnb can be considered a business travel expense. Depending on location and duration, provide a per-night accommodation allowance and specify the permitted hotel or room type.

Incidental expenses

Certain incidental expenses may arise during a business trip. This includes parking fees, WiFi charges, phone costs, laundry and dry cleaning services for extended stays, among other expenses. As long as they are part of the business travel and are justifiable, they can be categorised as travel expenses.

Insurance and healthcare

Health and travel insurance for a business trip are also legitimate business travel expenses. Prioritise employee safety with comprehensive travel insurance. To ensure your employees' safety, you should allow them to claim any medical and insurance expenses incurred while on business travel.

What is not considered a business travel expense

Expenses unrelated to business, even while on a business trip, should not be considered business travel expenses and are not eligible for travel expense reimbursement. Some examples of these are:

Personal entertainment

Any expense incurred for personal entertainment should not be considered for travel reimbursement, for instance, movie rentals in hotels, minibar expenses, cigarettes, spa charges, or show tickets.

Non-business meetings

If an employee goes on a personal meeting unrelated to business, the company should not bear the expenses. This includes transportation, meals, entertainment or any other expense that does not enhance the company's well-being.

Extraordinary expenses

Other miscellaneous expenses, such as tipping hotel staff, excess baggage, concierge services, or airport parking charges, should not be categorised as business expenses. You should outline these in your business travel policy to avoid confusion regarding what can be considered a business travel expense and what cannot. 

Leisure aspect of bleisure trips

Suppose an employee combines work with leisure, a practice commonly called bleisure. In that case, any expenses related to personal travel will not be eligible for business travel expense reimbursement. The same rule applies if an employee decides to extend their stay at a destination they are visiting for business travel.

The strategic value of expense tracking

To get a better picture of the finances

By tracking business travel expenses, you can keep your costs under control. Given that this is one of the highest controllable expenses for a business, you can identify areas where you tend to overspend and maintain your business's overall financial health.

For tax-related purposes

Tracking business travel expenses is crucial for tax purposes in Singapore. IRAS requires proper documentation, including receipts, travel purpose, and itineraries, to support expense claims. IRAS may request supporting documents such as the purpose and itinerary of the trip, a list of companies met, invoices and receipts. Keep these records for at least 5 years.

 Ensure compliance and improve policy clarity

Track travel expenses to confirm employees follow policy guidelines and prevent misuse. Use spending data to refine limit categories and approval workflows. This keeps controls strong while making the policy clearer and more practical for employees.

How to control your travel expenses related to business?

Draft a clear business travel policy

The key to controlling travel expenses is having a clear and robust business travel policy. Include spending limits for transport, meals, accommodation, booking timelines, approval workflows, and preferred vendors. Here's a Corporate Travel Expense Policy template to get you started.

Communicate your policy and encourage adoption

Your employees must be aware that your travel policy exists. Distribute it to all employees, make it accessible via your employee portal, and send reminders to those scheduling trips. Keep the policy simple and highlight key aspects.

Automate the approval process

Set up your expense management tool to send alerts for out-of-policy bookings or bookings made too close to travel dates. Requiring pre-approval before travelling or making big purchases can help prevent overspending. This works particularly well when combined with per diems, providing a full audit trail. You can use Aspire's approval flows to set up approval processes, notify managers of bookings and control out-of-policy spending.

Incentivise employees to stick to the policy

Offering employees an incentive or a reward for sticking to the travel policy can encourage them to reduce spending. If an employee makes cost-effective or low-budget bookings, consider rewarding them with part of the savings or gifting them a voucher. This will boost employee morale and make them more likely to stick to the budget. 

Have tie-ups 

Partner with hotels, transport providers and insurance companies to access corporate rates. Negotiate fixed discounts for frequent bookings. Direct employees to use approved partners to control costs and secure better rates or upgrades.

Look for bundle services 

As far as possible, try to bundle services. For instance, if you book accommodation that includes meals, you can save on meal costs. Using a travel agent to arrange flights, hotels, and meals could also prove cost-effective. 

Set a booking timeline

Booking travel too close to the business trip can increase travel expenses. Encourage your employees to plan their journeys in advance and book in advance to secure the most cost-efficient bookings. Try planning domestic travel 15 days in advance and international travel 30 days in advance.

How to manage and track business travel expenses efficiently in 2026?

Create a budget

Start with a company-wide budget for the year, then allocate to teams based on travel needs. Using budgeting software can help streamline the process and more closely estimate expenses. Aspire's budget feature enables you to take control of your business's travel expenses and control spending.

Categorise your expenses

Establishing clear categories helps you track and reduce spending. Categorise business travel expenses into transportation, accommodation, meals, on-ground transport, etc. Set up a miscellaneous category for other small spends. Encourage your employees to stick to these categories while filing for travel expense reimbursements.

Set the mode of payment

Issuing corporate cards to employees helps track and manage costs more effectively and reduces fraud. Aspire's unlimited corporate cards enable safe and secure spending. As far as possible, discourage spending from personal cards and in cash.

Leverage technology and automation

Modern expense management solutions automate policy enforcement and provide real-time visibility. Note that 85% of travel managers are now required to report carbon emissions.

Avoid certain pitfalls

• Don't give shared accommodation to employees to save costs; this could lead to an unpleasant and uncomfortable experience
• Don't skimp on insurance; it can cost you more in case of an emergency
• Don't get carried away with corporate deals because of cost savings; make sure that it is also convenient for your employees

Singapore-specific considerations

Double Tax Deduction for Internationalisation (DTDi)

Singapore companies expanding overseas may qualify for a Double Tax Deduction (200% tax deduction) on qualifying expenses for international market development, including overseas missions, trade fairs, and business development offices. The automatic deduction cap is $150,000 per Year of Assessment.

IRAS documentation requirements

Maintain receipts, invoices, purpose and itinerary of trips, list of companies met, and supporting documents proving business purpose. Keep records for at least 5 years. IRAS may request these documents during audits.

Takeaway

Business travel is important for any business looking to scale its operations. Estimating and tracking business travel expenses need not be a challenging task. Planning expenses in advance helps estimate annual spending and simplifies reimbursement. Being smart with bookings, bundling services, and leveraging technology helps control costs. Singapore businesses must ensure their policies comply with IRAS guidelines to maximise tax deductions and keep these expenses under control.