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Per Diem

A fixed daily allowance for lodging, meals, and incidental expenses during business travel, set by the IRS or GSA.

Per Diem Definition

Per diem (Latin for "per day") is a fixed daily allowance paid to employees or claimed by self-employed individuals to cover lodging, meals, and incidental expenses during business travel. The IRS publishes standard per diem rates by location.

2026 Per Diem Rates

  • Standard rate: $178/day ($118 lodging + $60 meals & incidentals)
  • High-cost areas (NYC, SF, DC, etc.): $297/day ($204 lodging + $93 M&IE)
  • Rates vary by city — check the GSA per diem lookup tool for specific locations

    • Using Per Diem as a Business

  • Employees: Pay the per diem rate instead of reimbursing actual receipts. If within IRS limits, it's not taxable income to the employee.
  • Self-employed: Can use per diem for meals only (not lodging). Must track actual lodging costs separately.
  • Accountable plan required: Employees must submit a travel report with dates, locations, and business purpose.

    • Advantages of Per Diem

  • Simplified expense tracking (no meal receipts needed)
  • Predictable travel costs for budgeting
  • Employees keep the difference if they spend less

    • FAQ

    Q: Can I use per diem rates for local meals?

    A: No — per diem only applies to overnight business travel away from your tax home. Local business meals follow the standard 50% deduction rule.

    Related Terms

  • Reimbursement
  • Business Expense
  • Tax Deduction
  • Mileage Deduction

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