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Employment Development Department
Employment Development Department

Total and Partial Unemployment TPU 460.45

Expenses

Any money paid to a claimant for expenses is not considered remuneration for services and, therefore, is not wages. This is true whether this money is paid in advance or as a reimbursement.

For example, travel costs are not wages and are not deductible from the weekly benefit amount. Travel costs are payable by the employer when work is performed beyond normal commuting distance and the allowance for travel approximates the actual cost. As opposed to travel costs, travel time is wages and is deductible from the weekly benefit amount. An allowance for travel time is a remuneration paid to the worker for his services during the time necessary to travel to his work.

Subsistence allowances are also for expenses and, as such, are not wages. Subsistence allowances are ususally paid when the place of employment is not fixed. The employee pays his living expenses while traveling beyond regular commuting distance; the subsistence allowance merely reimburses him for his extra expense incurred while away from his home on the employer’s business and approximates the actual costs of travel.

In Benefit Decision 6295 the claimant was a union convention delegate who received $10 per day for his services plus expenses for lodging and travel. The Board ruled that the $10 was wages but did not consider the payment for expenses as wages.

However, not all such payments are nondeductible expense payments. The value of board and lodging given in lieu of cash wages is remuneration for personal services and is reportable under Code Sections 1252 and 1279. Reportable board and lodging is included in the hiring agreement as part of the regular pay and is usually mentioned as "including meals", "including room and board", or "with one meal a day", etc.

In Tax Decision 2128 union convention delegates were paid their regular salary plus an amount for their services at the convention and expenses incurred. In discussing whether these payments were wages the Board said:

"The additional amounts . . . are . . . wages for employment unless they can be considered as gifts or remuneration for expenses incurred and not as remuneration paid for services rendered in employment."