Last Updated on August 24, 2020 by Mr. FightToFIRE
The benefits of an expenditure allowance
An expenditure allowance or flat-rate allowance means you get a fixed budget per day paid per month from your employer you can spend. This amount can vary from 50 EUR to 100 EUR or more.
Coincidentally, while I was on a business trip for work news came out that MEPs, Members of European Parlement, don‘t require to publicize their expenditures. Now, this doesn’t seem like a big deal till you realize their allowance is €4.416 per month. You read that right, four thousand, four hundred sixteen euro per month, paid using European taxpayer money.
With 751 MEP’s, Europe spends € 3,316,416/month on expenditure allowances alone!
Since you get a fixed allowance per day, you can decide yourself how you spend it. Maybe more importantly, how you can save and keep as much as possible for yourself. Posit that a majority of MEPs do this every month.
Coverage of real costs
The second possibility is your employer reimbursing your real costs, the costs you made on your trip. Your employer pays back all the expenses you made.
I find it less preferable (not that you have a choice most of the time) than the first option since you only get paid back after you made the expense. With this expense coverage, your employer can determine what they want to pay back and what not.
This option is the one that applies when I travel abroad. While this doesn‘t earn me money, I can save some money for a few days since the company covers my expenses during that period.
As such, I’m not really complaining that I can do it. Since I’m not bound by a family or a house that I need to maintain I have the possibility to stay away and go abroad for longer periods of time.
It’s something small that doesn’t happen often so I try to make good use of it when I get the chance.
At the end of the ride, the impact it has on my savings rate is minimal. You can see just how much real impact (or lack thereof) it has on my SR through my savings rates page.
Nothing beats face-to-face
Besides the monetary benefit, I do enjoy the fact that I can meet my colleagues from another country and talk to them in person. Technological aids such as Skype for Business, Slack, or any of the other communication tools help close the gap but it just isn’t the same.
Thanks to meeting my colleagues in person I can efficiently transfer my message to the other party and instantly correct it if I notice they don’t grasp it the first time.
It is thanks to small (facial) queues that I’m able to more efficiently convey a certain idea or in case of programming explain a piece of code.
Besides the face-to-face interaction, I’m also able to form a tighter bond. Since I’m out of your comfort zone and removed from the day-to-day routine, I can more easily go for a drink afterward or have a (business) dinner.
So go ahead and travel abroad, just don’t forget to try and do it using the money of others. Well, you know, others being your employer and in a legal way.
You will never see eye-to-eye if you never meet face-to-face.”
Chairman and CEO