Travel Policy Template for Business Travel in India

A travel policy sets the rules for official trips: who approves them, how tickets and hotels are booked, which class of travel and hotel each grade is entitled to, how much daily allowance is paid and how the trip is settled afterwards. Clear entitlements by grade and city stop every trip from turning into a negotiation, and they keep travel costs predictable for finance.

When to use it: Use it when employees start travelling regularly to branches, plants, clients or trade fairs, when claims vary widely for similar trips, or when finance needs control over travel spend. Admin and finance draft it with HR, and the finance head and a director approve the grade-wise entitlements.

Travel policy template

Copy the text below and replace everything in square brackets with your company details.

1. Purpose

This policy sets out how official travel is approved, booked and paid for at [Company Name], and the travel, stay and daily expense entitlements for each grade.

2. Scope

It applies to employees travelling on company business within India. International travel needs [director] approval and follows Annexure [F]. Local travel within the base city is covered by the Expense reimbursement policy.

3. Approval and booking

Every trip needs the reporting manager's approval before booking, through a travel request stating the purpose, dates and places.
Tickets and hotels are booked by [the admin travel desk] at least [7] days ahead where possible.
Travel days are recorded as on duty under the On duty policy.
Personal leave may be joined to a business trip with the manager's approval, provided it adds no travel cost for the company.

4. Entitlements by grade

[Grades 1 to 3]: train in [AC 3-tier] or bus; hotel up to [₹Amount] a night in Tier 1 cities and [₹Amount] elsewhere.
[Grades 4 to 6]: train in [AC 2-tier], or economy air for journeys over [8] hours by train; hotel up to [₹Amount] a night in Tier 1 cities and [₹Amount] elsewhere.
[Grades 7 and above]: economy air; hotel up to [₹Amount] a night in Tier 1 cities and [₹Amount] elsewhere.
Tier 1 cities are [Mumbai, Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata and Pune].

5. Daily allowance

A daily allowance of [₹Amount] in Tier 1 cities and [₹Amount] elsewhere covers meals and incidentals, without bills.
Half the daily allowance is paid for trips shorter than [12] hours.
Where the host or hotel provides meals, the allowance is reduced by [Number] percent.

6. Advance and settlement

An advance of up to [80] percent of estimated expenses may be taken before the trip.
The trip is settled within [7] working days of return, with tickets, hotel invoices in the company's name showing its GSTIN, and other bills.
Any unspent advance is returned or adjusted in the next salary.

7. Not reimbursed

Alcohol, personal entertainment, minibar charges and in-room movies.
Traffic fines, penalties and excess baggage for personal items.
Upgrades beyond entitlement unless approved in writing.
Travel and stay costs of family members accompanying the employee.

8. Safety

Employees travelling alone, especially women, stay at hotels from [the approved list] and are not asked to make late-night road journeys when a safer option exists.
Employees share their itinerary with the travel desk and report any change.
[Travel accident cover] applies to all official trips.

9. Responsibilities

Employees: travel within entitlements, keep bills and settle on time.
Managers: approve only trips that are needed and check claims before they go to finance.
Admin and finance: book efficiently, pay approved claims within [10] working days and report travel spend by department.

10. Review

Finance reviews hotel limits, daily allowances and city tiers every [12] months against actual bills and changes in hotel rates.

What to include

Entitlements by grade and city

Write the travel class, hotel limit and daily allowance for each grade and city tier. This is the section employees read first, and it settles most questions before a trip is even booked.

Approval before booking

Require approval before tickets are bought. Approving a trip after booking leaves the manager no real choice and finance no control over cost.

GST invoices in the company name

Ask for hotel and travel invoices in the company's name with its GSTIN. This gives a clean audit trail and lets finance claim input tax credit where it is available.

Daily allowance without bills

A fixed daily allowance for meals and incidentals avoids collecting dozens of small bills. Set it by city tier and reduce it when the host provides meals.

A settlement deadline

Fix a deadline for settling advances and claims. Open advances pile up quickly and turn into recovery problems at exit.

Traveller safety

Include rules on solo travel, late arrivals and hotel choice. Safety provisions show employees that the policy is about more than cost.

Common mistakes to avoid

Approving trips after the tickets are booked, which makes approval a formality.
Using one hotel limit for Mumbai and for a small district town.
Accepting hotel invoices without the company's name and GSTIN.
Letting travel advances stay open for months after the trip.
Leaving it unclear whether weekend stays and personal days are paid.

Run it in ZeniaHR

ZeniaHR does not handle travel bookings or expense claims, so trip approvals and settlements stay with admin and finance outside the system. Travel days are recorded through on duty requests, approved by the manager and then HR, so the traveller is never marked absent. Once finance approves a claim, HR adds the amount as a reimbursement input in Direct Payroll, and it is paid with that month's salary.

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Frequently asked questions

What should a company travel policy include?

It should cover approval before booking, how tickets and hotels are booked, travel class and hotel limits by grade and city, the daily allowance, travel advances, the claim deadline and bills required, items that are not reimbursed and traveller safety. Grade-wise tables make the policy quick to apply.

What is a daily allowance on business travel?

A daily allowance, also called per diem, is a fixed amount paid for each day of travel to cover meals and small expenses without bills. Companies usually set it by grade and city tier and reduce it when meals are provided by the host or the hotel.

How is attendance marked on travel days?

Travel days on official work are usually marked as on duty, so the employee is treated as present and no leave is charged. The employee raises an on duty request for the travel dates, and the manager approves it along with the trip.

Can an employee combine personal leave with a business trip?

Yes, if the policy allows it and the manager approves. The usual rule is that the company pays only what the business trip would have cost, and any extra fare, hotel nights or change fees are paid by the employee. The personal days are applied for as leave.