Define: Subsistence Expenses
Subsistence Expenses is a contract term referring to the reasonable costs of accommodation, meals, and non-alcoholic drinks that an employee or contractor incurs while required to travel overnight for business purposes. Contracts typically set daily caps, define what counts as reasonable, and require receipts before the employer or client reimburses these costs.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Subsistence Expenses Means in a Contract
Subsistence Expenses is a defined term used in employment contracts, consultancy agreements, and travel policies to describe the everyday living costs a person incurs while away from their usual place of work on business. These costs typically cover hotel or other accommodation, meals, and non-alcoholic drinks, and the term is almost always tied to mandatory overnight travel rather than ordinary commuting or local errands.
The purpose of defining Subsistence Expenses in a contract is to draw a clear boundary between what the paying party will reimburse and what remains the traveler's own responsibility. Without a clear definition, disputes can arise over whether a lavish dinner, a minibar charge, or a taxi to a restaurant should be reimbursed. A well-drafted clause removes ambiguity by stating precisely which categories of spending qualify.
In many organizations, this term appears alongside a broader Relevant Circumstances
Relevant Sectors