--- title: "Travel and expense (T&E)" description: "T&E means travel and expenses, the costs of business travel. What counts as T&E, how the IRS treats reimbursements and what records to keep." canonical: https://engine.com/glossary/travel-and-expense updated: 2026-11-02 author: "Engine Editorial" --- # Travel and expense (T&E) Travel and expense (T&E) is the cost of employee business travel, typically airfare, ground transportation, lodging and meals, plus incidentals like tips and laundry. Also called: T&E, travel and expenses Not to be confused with: a T&E policy, the rules for these costs Updated November 2, 2026 by Engine Editorial ## What does T&E mean in business? T&E is shorthand for travel and expenses, the money employees spend getting to and working on the road. This cheat sheet covers how to think about T&E and what to check before you reimburse it. The detail is further down. ### How to think about it - **It's more than flights and hotels.** T&E covers airfare, trains, rental cars, taxis and rideshares, hotels and meals, plus incidentals like tips and laundry. - **The IRS test is ordinary and necessary.** For tax purposes, travel expenses are the ordinary and necessary costs of traveling away from home for business. Ordinary means common and accepted in your trade, and necessary means helpful and appropriate. - **Reimbursements follow three rules.** Under an IRS accountable plan, expenses need a business connection, employees account for them within a reasonable time and return any excess. - **A policy sets the limits.** A T&E policy covers what employees can spend on things like meals, flights and hotels, how and where to book, and how expenses get reported or reimbursed. ### What to check - **Receipts.** The IRS generally expects documentary evidence such as receipts, canceled checks or bills. One exception is an expense, other than lodging, under $75. - **Hotel receipts.** A hotel receipt supports a business stay if it shows the hotel's name and location, the dates of the stay and separate amounts for charges like lodging, meals and phone calls. - **Deadlines.** The IRS treats accounting for expenses within 60 days, and returning excess reimbursement within 120 days, as a reasonable period. - **Gifts.** The deduction for business gifts is capped at $25 per person per tax year. ## Accountable plan vs. nonaccountable plan | | Accountable plan | Nonaccountable plan | | --- | --- | --- | | IRS rules | Meets all three: business connection, adequate accounting, return of excess | Misses one or more of the three | | On the employee's Form W-2 | Reimbursements aren't reported as pay | Reimbursements are reported as pay | | Excess not returned in time | Treated as paid under a nonaccountable plan | Already reported as pay | ## How it works on Engine Admins set lodging, flight and rental-car rules in [travel policies](https://engine.com/features/travel-policy-enforcement), and Engine applies them during booking. With [Direct Bill](https://engine.com/features/direct-bill), Engine pays eligible hotels and bills the company in arrears on one consolidated invoice. [Reporting](https://engine.com/features/travel-reporting-analytics) uses booking and billing data captured on Engine, filterable by department, project or cost code. Trips booked outside Engine aren't automatically included. ## Take hotel stays off expense reports With Direct Bill on Engine, eligible hotel stays go on one consolidated company invoice, so travelers never front the room charge. Free to use. [Get started](https://engine.com/sign-up) ## Questions ### What does T&E stand for? Travel and expenses. It refers to the costs of business travel, such as airfare, transportation, accommodation and meals, plus incidentals like laundry service and tips. ### Are T&E expenses tax-deductible? Ordinary and necessary expenses of traveling away from home for business generally are. Entertainment expenses generally aren't, and business meals are usually 50% deductible when you or an employee is present and the meal isn't lavish or extravagant. ### Can employees deduct travel expenses their employer doesn't reimburse? Most W-2 employees can't. Form 2106 is limited to Armed Forces reservists, qualified performing artists, fee-basis state or local government officials and employees with impairment-related work expenses. ### What is an accountable plan? An employer reimbursement arrangement that meets three IRS rules, a business connection, adequate accounting within a reasonable time and return of any excess. Reimbursements under it aren't reported as pay on the employee's Form W-2. ## Go deeper - [T&E meaning, the full guide](https://engine.com/blog/t-e-meaning) - [Engine travel policy enforcement](https://engine.com/features/travel-policy-enforcement) - [Travel expense management](https://engine.com/glossary/travel-expense-management) - [Per diem](https://engine.com/glossary/per-diem) ## Sources 1. Engine, "T&E meaning: What it is and why it's important," https://engine.com/blog/t-e-meaning, accessed November 2, 2026. 2. Engine, "How to Build a T&E Policy: Best Practices," https://engine.com/blog/te-expenses, accessed November 2, 2026. 3. Internal Revenue Service, "Publication 463 (2025), Travel, Gift, and Car Expenses," https://www.irs.gov/publications/p463, accessed November 2, 2026. 4. Engine, "Company Travel Policy Enforcement," https://engine.com/features/travel-policy-enforcement, accessed November 2, 2026. 5. Engine, "Direct Bill for Company Hotel Travel," https://engine.com/features/direct-bill, accessed November 2, 2026. 6. Engine, "Travel Reporting and Analytics," https://engine.com/features/travel-reporting-analytics, accessed November 2, 2026.