Local Meals and Entertainment Expenses
Guidelines for Local Meals and Entertainment Expenses (non-travel)
These guidelines are intended to advise employees regarding college business expenses related to meal and entertainment expenditures incurred outside of overnight travel. Employees with questions are encouraged to contact the Business Office for clarification and further assistance.
Internal Revenue Service regulations state that ordinary and necessary business expenses are reimbursable. The IRS defines ordinary as “common in your field of trade, business or profession”; and necessary as “helpful and appropriate for your business.” The IRS states that meal and entertainment expenses cannot be “lavish or extravagant.”
The Meals and Incidental Expense (M&IE) rates for federal government employees provide a guide by location to determine what is reasonable. View the rate for different locations around the United States and for international locations.
In order to avoid additional payroll taxes, Carleton reimburses employees under an “accountable plan,” which requires that employees:
- document expenses by costs, dates, and purchase descriptions for expenditures
- describe the business purpose of meals, providing the name and professional position of meal attendees
- return to the employer, on a timely basis, any amount advanced in excess of the substantiated expenses
- submit to the employer requests for reimbursement within 60 days of purchase or event
The College does not reimburse on a per diem basis, however, when itemized receipts are not readily available per diem guidelines may be utilized along with the same accountable plan documentation to fulfill IRS business expense reporting requirements. When an employee uses a Carleton purchasing card, no receipt is required for transactions less than $25, as long as the cardholder provides the business purpose and attendee descriptions.
Meal and Entertainment Expenses with Guests of the College
Meal and entertainment expenses often include business guests of the College. The College will pay for reasonable, authorized, and appropriately documented meal and entertainment expenses associated with bringing a guest to the College. Expenses incurred when interacting with guests of the College (trustees, professional guests, alumni, parents, job candidates, donors, etc.) should be reasonable in relation to the nature of the function and the resulting business benefit expected to be derived from the expenses. The number of participants attending business meals should be limited to those individuals necessary to achieve stated business purposes. The amount of alcohol served at such events should remain reasonable and responsible at all times.
Meal and entertainment expenses may be provided at restaurants or employee residences. If an event is hosted at a faculty or staff residence, local social host regulations apply to anyone being served alcohol. Authorized faculty and staff may also entertain guests of the College at dining facilities on campus. The departmental dining option commonly includes entertaining visiting scholars, prospective students, job candidates, alumni, and potential donors. Employees may find Dining Department Charge information on the Campus Services website.
Meals for employee spouses are typically not considered business expenses unless the spouse is also a professional peer of the entertained guest and the presence of the spouse at the meal is significantly more than social.
Meals between Employees
Meals between employees are usually considered personal expenses. Business meals between employees should be infrequent and occur only when they are necessary and integral to conducting College business. Meals taken on or off campus, as a matter of convenience or where the business conversation is an incidental part of the meal, do not qualify as business expenses. Business meals between colleagues typically encompass a significant business purpose, demonstrated through a meeting agenda or other supporting documentation. The frequency of such meetings and the related expenses must be reasonable and appropriate to the purpose of the discussion and the nature of the business conducted. Purely social gatherings are not eligible for reimbursement.
The on campus departmental dining option is not intended for individual use or for meetings between co-workers, except for reasonable and necessary meal expenses at which a focused business discussion takes place to carry out the business of the College as defined above.
College Sponsored Events
College sponsored events are intended to provide hospitality to both internal and external parties in a social setting that is appropriate and customary for promoting College business. Examples of business entertainment events include receptions for professional guests of the College, alumni functions, donor recognition events, and welcome receptions for parents and students. Entertainment expenses should be reasonable in relation to the nature of the function and the resulting business benefit derived from the expenses.
The College also sponsors specific celebratory events including the annual holiday receptions, opening convocation, honors convocation, commencement, reunion, employee recognition, etc. Individual departments and programs are authorized to celebrate their graduating student majors. Other departmental or individual celebratory events that duplicate college sponsored recognition events are not eligible for reimbursement.
Personal celebratory events such as baby showers, birthdays, weddings, funerals and similar events are recognized by the college in limited circumstances. Please contact external relations for additional guidance. Welcome receptions and farewell/retirement receptions are both recognized as college business expenses and may be planned with moderation.
The Internal Revenue Code and regulations presume that there is no gratuitous relationship between an employer and an employee. Therefore the general rule is that a “gift” is actually income to the employee because it grows out of the employment relationship where an employee expects to be compensated for services provided to the employer. The IRS does not provide for any de minimis gift amount that can be ignored as compensation in the form of cash or gift cards.
Entertainment expenses may be incurred by offices frequently hosting external constituencies on campus, such as prospective students, trustees, donors, alumni, parents, job candidates, professional guests, etc. Coffee, water, soda, small snacks, and other simple refreshments may be purchased to entertain visitors to the office or classroom.
Last Revised: March 30, 2015
Last Reviewed: March 1, 2021
Maintained by: Business Office