(Uploaded/ 2025/9/2)

What is a travel expense policy (per diem)?

When you work, you will have business trips to meet with clients in distant locations.
Since this is necessary for the company’s sales, expenses incurred on a business trip become company expenses.
This refers to transportation and accommodation costs, but if you have a travel expense policy, it is possible to provide a per diem allowance to the person who went on the business trip in addition to these costs.
The per diem is a company expense and does not become salary for the executive or employee who receives it, so their personal taxes and social insurance premiums do not increase. Also, the per diem is eligible for deduction in the consumption tax return.
In other words, it is a system that is advantageous for both the corporation and the individual.

What is a per diem? A per diem is a fixed allowance provided to avoid the hassle of tallying up meal costs and other miscellaneous expenses incurred in addition to accommodation and transportation costs.
Therefore, it is not originally intended for tax-saving purposes. It is important that it is provided strictly according to the rules set by the company. Thus, it is necessary to create a travel expense policy.
Next, I will explain the contents that should be stipulated in a travel expense policy.

Purpose of the Travel Expense Policy
First, as a basic item for the document, you need to set the purpose of the travel expense policy. For example, to stipulate procedures and travel expenses when an executive or employee goes on a business trip.

Eligible Persons
Since it is not appropriate to limit it to specific people, you would need to state that all individuals are eligible.

Definition of a Business Trip
To avoid ambiguity, you should define what a business trip is. Generally, it is often defined as a trip where the travel distance exceeds 100km. It is also possible to define categories of business trips, such as domestic day trips in Japan, domestic overnight trips, and overseas trips.

Type and Amount of Travel Expenses
You will determine what types of expenses will be considered travel expenses.
Typically, there are three: transportation fees, accommodation fees, and per diem. Of these, transportation fees and accommodation fees are often reimbursed based on actual costs. This means you will keep receipts and other documents and reimburse the person who went on the business trip for that amount. For per diem, you will state how much is paid per day.
If you have defined categories such as domestic day trips, domestic overnight trips, and overseas trips, it is possible to set amounts for each category. You can also change the amount according to positions such as president, executive, department manager, and general employee.

Market Rate for Per Diem
You cannot provide any amount as a per diem. This is because if you could, it would be possible to provide any amount of company money to the president without tax. In other words, there is a market rate. Below is the general market rate.

Domestic day trips and domestic overnight trips in Japan
JPY 2,000 to JPY 4,000 (per day)
Overseas trips
JPY 4,000 to JPY 7,000 (per day)

Points to Note
As mentioned above, per diem is a system that is advantageous for both the corporation and the individual, so the tax office may doubt whether a business trip actually took place.
Lying about a business trip is of course not allowed, but it is important to leave evidence to prove the trip. It is highly recommended that you create a report for each business trip you take.

Summary

Per diem is a system where it becomes a company expense, not salary, and has the effect of reducing the amount of consumption tax.
It is a system that is advantageous for both the corporation and the individual.
Therefore, it is important to correctly create a travel expense policy and report.