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What is T&E in business? Meaning, examples, and how it works
The expenses T&E covers, how the process works, and how to manage T&E spending.
In business, travel and expense (T&E) is the money employees spend while traveling for work or hosting clients, such as airfare, hotels, meals, and client entertainment, with the process your company uses to approve, track, and reimburse it.
This guide contains:
- What counts as a T&E expense
- How the T&E process works
- How to manage T&E in your business
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Why T&E is important in business
T&E is company money that employees often spend before anyone reviews it, so it needs rules to ensure it stays on budget, is tax-compliant, and is free of fraud.
Here’s what’s at stake:
- Budget control: T&E is often its own line item in company and department budgets, and spending can drift without limits and pre-approval (see our guide to a corporate travel budget).
- Tax compliance: Under IRS rules, business meals are generally 50% deductible, entertainment has been nondeductible since 2018, and business gifts are deductible up to $25 per recipient a year, with records needed for every deduction.
- Fraud prevention: Common schemes include duplicate receipts, inflated mileage, and personal purchases claimed as business costs (in the ACFE’s 2026 Report to the Nations, expense reimbursement schemes appeared in 13% of occupational fraud cases, with a $36,000 median loss).
- Employee experience: Employees who pay out of pocket must wait for reimbursement, which can be frustrating.
What counts as a T&E expense?
A cost counts as T&E when an employee incurs it away from their usual workplace for a business purpose.
Here’s what that covers:
| Category | Common examples |
|---|---|
| Transportation | Flights, trains, rental cars, taxis, rideshares, and mileage when you drive your own car |
| Lodging | Hotels and other accommodation |
| Meals | Meals while traveling and meals with clients |
| Entertainment | Client events and tickets with a business purpose |
| Incidentals | Tips, parking, tolls, baggage fees, laundry, WiFi, and business calls |
| Other business costs | Conference registration fees, shipping display materials, and client gifts |
On the other hand, T&E generally doesn’t cover the daily commute, personal travel or upgrades, costs for family members, traffic fines, personal shopping, or lavish spending.
How the T&E process works
Every T&E expense goes from approval before the trip to accounting entry after it (check our guide to travel and expense management to learn more).
Here’s how it looks:
- Request approval for the trip, with the destination, dates, and estimated cost.
- Book flights and hotels.
- Capture each expense, either from a corporate card transaction or a receipt for costs paid out of pocket.
- Check each expense against the company’s policy so that anything over the limit is flagged.
- Approve the expense report (e.g., a manager, then finance), with any exceptions highlighted (see our guide to travel and expense reporting).
- Reimburse out-of-pocket costs and reconcile card spend with the approved report.
- Sync each expense to the accounting system under the correct cost center and general ledger (GL) code, which is the account in which the expense is recorded.
Actual expenses compared with per diem
A company can pay T&E back in one of two ways:
- With actual expenses, you pay first and get back what your receipts show.
- With a per diem, you get a fixed daily amount for lodging, meals, and incidentals, and you only prove the time, place, and business purpose of each trip, without meal receipts.
You can also combine the two (e.g., a per diem for meals and incidentals, with hotels paid as billed).
How to manage T&E in your business
Managing T&E is one part of travel management, which also covers supplier deals and traveler safety.
If you handle T&E for your company, these five practices do most of the work:
- Write a T&E policy that lists eligible expenses, spending limits, approval steps, receipt rules, and reimbursement timelines (see our guide to a company travel expense policy, which comes with a free template).
- Issue corporate cards to frequent travelers, so they don’t have to pay out of pocket and wait for reimbursement.
- Use travel and expense management software (e.g., SAP Concur, Navan, Ramp) to capture receipts, check expenses against your policy, and sync data with your accounting system.
- Route bookings through one travel management system, so you can see all trip spend.
- Review your T&E data regularly to spot overspending and set the next budget (see our guide to travel expense analytics).
Give traveling employees secure data with Holafly for Business
When your team is on the road, secure mobile data is key.
Holafly for Business is an eSIM provider available in 160+ destinations, so your employees can use mobile data on their devices without buying local SIM cards or incurring roaming charges. You also get access to our centralized management platform, the Holafly Business Center, where you can manage individual eSIMs, invoices, and data usage.
Holafly Plans for Business come in four tiers, all featuring hotspot, 4G/5G, and 24/7 multilingual support:
- Daily: Unlimited data with pay-per-day flexibility, built for short business trips under 16 days a month.
- Monthly: Unlimited data for teams traveling more than 16 days a month, a fit for frequent travelers and long-term remote staff.
- Annual: Unlimited data for ultra-frequent travelers, suited to long-term global operations and predictable annual budgets.
- Enterprise: Bespoke plans for companies managing travel for 20+ employees a year, with volume discounts, a dedicated account manager, priority support, and custom integrations, built to optimize costs, streamline operations, and ensure seamless global connectivity across teams.
Not sure which plan is right for your team? Book a demo.
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I’m a writer with over eight years of experience in digital content. My work has appeared in publications such as The New York Times, Forbes, Business Insider, and the BBC. At Holafly, I write clear, practical guides to help travelers stay connected with eSIM technology. In my spare time, I enjoy car detailing, biking around Warsaw, and capturing portraits.
