Construction and field service employee expense policy: a template

1. Purpose and scope

This policy covers how [Company name] pays for and repays business expenses. It applies to [all employees] [field employees and their supervisors]. It is meant to be an accountable plan under IRS rules, so reimbursements under it are not wages unless it says so.

2. The job or work order on every expense

2.1 Every expense carries its job number, the work order number for a service call, or [Overhead]. If you don’t know the number, ask [your foreman] [dispatch] before you buy.

2.2 A purchase for more than one job is split by what each job used, with the split written on the receipt[, or bought on a ticket per job].

Note: An accountable plan needs enough detail to show what each expense was and that it was for the business, and the job number does much of that.

3. Materials and parts

3.1 Buy on [the company’s supply-house accounts] [a purchase order], giving the job or work order number at the counter so it prints on the ticket.

3.2 On your own card, buy only what the job needs; the company repays the itemized receipt, tax included.

3.3 Return unused material to [the shop] [the supplier] and credit the job it came from.

4. Tools

4.1 The company provides [the tools and equipment your job requires] [power tools, specialty tools and equipment][; employees in [trades] provide the hand tools customarily required by their trade, as listed in [the tool list]].

4.2 Approved tools are repaid against the itemized receipt, up to $[X] an item without approval; above that, [title] approves first. Tools the company buys or repays are company property.

Note: A flat tool allowance paid without receipts, or without returning what isn’t spent, is taxable wages, and so is a tool payment that replaces part of hourly pay. For non-exempt staff, tools you require them to provide can’t cut into minimum wage or overtime. California’s construction wage order has employers provide required tools, though employees paid at least twice the minimum wage may provide hand tools customarily required by their trade.

5. Safety gear

5.1 The company provides the protective equipment your work requires, such as [hard hats, safety glasses, hearing protection, gloves and fall protection], in a size that fits, at no cost to you, and replaces it when it wears out or breaks; required gear you buy yourself is repaid in full.

5.2 Safety-toe boots: [the company pays up to $[X] a year] [non-specialty boots you may also wear off the job are yours to buy].

5.3 Replacing gear you lost, or damaged on purpose, is [your cost] [at [title]’s discretion].

Note: OSHA makes required PPE the employer’s cost, replacements included unless the gear was lost, or damaged on purpose (29 CFR 1926.95 and 1910.132). Exceptions include non-specialty safety-toe footwear and prescription safety eyewear workers may wear off the job site, everyday clothing and weather gear. Check state law before deducting anything from pay.

6. Company vehicles and fuel cards

6.1 Company vehicles are for company business. Taking one home is [not allowed] [allowed for [on-call technicians] [crew leads], with [title]’s written approval]; other personal use, beyond a minor stop on the way, is not.

6.2 Use [the company fuel card] only for company vehicles, and never claim mileage for a company vehicle.

Note: Commuting in a company vehicle is taxable pay unless it’s a qualified nonpersonal use vehicle, such as a van marked with your company’s name, seating two at most, with permanent shelving filling most of the cargo area. If you require commuting in it for business reasons and a written policy bars other personal use, the IRS commuting rule values it at $1.50 each way, except for control employees such as owners and directors (IRS Publication 15-B).

7. Personal vehicles and mileage

7.1 Business driving in your own vehicle is repaid at [the IRS business standard mileage rate in effect on the date of the drive] [[X] cents a mile], plus business parking and tolls; the rate covers fuel.

7.2 Business driving includes driving between job sites, from [the shop] [the yard] to a job site, and to a supplier or permit office. [If you report to [the shop] most days, home to a job site expected to last a year or less counts too.]

7.3 Home to your regular work location, such as [the shop] [the yard], is commuting and isn’t repaid, even with tools aboard. [With no regular work location, home to a job site in [the metropolitan area] is commuting too.]

7.4 Record each drive at or near the time: date, start and end, job or work order, and miles.

Note: The 2026 IRS rate is 72.5 cents a mile through June 30 and 76 cents from July 1; anything above it is taxable wages. Ask your tax adviser whether a yard visited each morning is a regular work location. For non-exempt staff, driving between job sites, or from the shop after picking up tools, is paid work time.

8. Travel to job sites away from home

8.1 [The project manager] approves each overnight trip and its budget before you leave.

8.2 Lodging: [the company books and pays for rooms] [repaid against the itemized bill up to [the federal lodging rate] [$[X] a night]].

8.3 Meals: [choose one]

• [Option A: per diem at [the federal meals and incidentals rate where you stay], 75% on the days you leave and return, with no receipts.]
• [Option B: actual meals up to $[X] a day, against receipts.]

8.4 Per diem is paid only for days away overnight, not for days at home or to anyone who lives within [X] miles of the job. [On a job expected to last more than a year, any living allowance goes through payroll as wages.]

8.5 [Trips home every [X] weeks are repaid up to what staying would have cost.]

Note: Per diem is tax-free only for travel away from your tax home, on a job realistically expected to last a year or less, up to the federal rate where you stay; above that rate, on a longer job, or in place of wages, it’s wages. GSA’s standard rates from October 1, 2026 are $113 a night for lodging and $68 a day for meals and incidentals.

9. Meals with customers and general contractors

9.1 A meal with a customer, owner or general contractor needs a business purpose, someone from the company there, and each guest’s name and company. It’s repaid up to $[X] a person with tax and tip[; alcohol [never] [up to $[X] a person]].

9.2 Gifts to customers, owners or general contractors: [not allowed] [up to $[25] a person a year, with [title]’s approval]. Never give anything to an inspector or other public official.

9.3 If you’re on a meals per diem, the company repays only the guests’ share of a business meal.

Note: Business meals are generally 50% deductible, and only if not lavish and someone from the company is there; entertainment isn’t deductible; gifts are deductible up to $25 a person a year. Repaying your own share of a meal on top of a meals per diem makes that share wages.

10. Approvals

Expenses within this policy are approved [automatically] [by your foreman]. Above these amounts, or outside this policy, approval comes first:

• [Materials over $[X] for a job: [the project manager].]
• [Parts over $[X] for a service call: [the dispatcher] [the service manager].]
• [Tools over $[X]: [the superintendent] [the operations manager].]
• [Overnight travel for a job: [the project manager], before the crew leaves.]
• [Anything over $[X] or outside this policy: [the owner].]

No one approves their own expenses.

11. Receipts

Submit an itemized receipt or a clear photo for every purchase [of $[X] or more] and every night of lodging; supply-house tickets show the job or work order number. For a lost receipt, submit a signed statement of the amount, date, place, job and purpose.

Note: The IRS requires a receipt for lodging and for any other travel expense of $75 or more; Illinois requires a signed statement for a missing receipt.

12. Deadlines

Submit job materials and parts within [7] days, and before [the billing cutoff] for time-and-materials work; submit everything else within [30] days. Claims more than 60 days old [are paid through payroll as taxable wages] [need approval from [title]]. Return any advance or overpayment within [120] days of the expense.

Note: IRS rules treat 60 days to account and 120 days to return any excess as reasonable; Illinois allows 30 days to submit unless the policy allows more. Check state law before refusing a late claim.

13. When reimbursement is paid

Approved claims are paid [by direct deposit] within [X] days of approval, and never later than 30 days after you submit them.

Note: Iowa and New Hampshire set a 30-day limit; Iowa also requires a written reason for refusing all or part of a claim.

14. What isn’t reimbursed

Commuting under section 7.3, personal detours, traffic and parking tickets and other fines, personal use of company vehicles or fuel cards, tools and clothing bought for personal use, [alcohol outside section 9.1] and [other items].

Note: In California, an agreement to waive reimbursement is void.

15. Records

[Title] keeps receipts, drive logs, approvals and the tool list for [X] years[, or longer where a contract requires]. Employees who hand theirs in and are repaid generally don’t need to keep copies.

Note: The IRS generally asks for three years from filing the return, and at least four for employment tax records.

16. State and local law

Where a state or local law gives employees more, such as reimbursement of all necessary expenses, tools provided by the employer or a shorter payment deadline, that law applies. [List your states and cities.]

Note: California, Montana and South Dakota require employers to repay necessary work expenses; Illinois does within its own rules, which exclude losses from an employee’s own negligence, normal wear, or theft the employer’s negligence didn’t cause.