Travel Glossary · Corporate Travel
Per Diem
Definition
Per Diem: A per diem is a fixed daily allowance an employer pays or reimburses for a traveler’s lodging, meals, and incidental expenses on a business trip.
Per diem simplifies expenses: instead of submitting a receipt for every meal, travelers receive a set daily amount. In the US, the General Services Administration (GSA) publishes rates for lodging and for meals and incidental expenses (M&IE) across the continental US, and the State Department sets rates for foreign locations. Many private employers use these federal rates as a benchmark.
Rates vary by city and sometimes by season. Federal rules pay 75% of the M&IE rate on the first and last days of travel, and many companies follow the same convention. Under IRS rules, per diem paid under an accountable plan at or below federal rates is generally not taxable to the employee; confirm the details with your tax advisor.
A clear per diem rule, written into your travel policy, heads off expense disputes. Our per diem guide explains how to set one.
Example: If a city’s M&IE rate were $80, a traveler would receive $60 on the travel days at each end and $80 on each full day in between.
Go deeper
- Travel GuidesPer Diem Explained: How Business Travel Allowances WorkWhat per diem means for business travel, how GSA and State Department rates work, the tax rules, first-and-last-day rules, and setting a company per diem.
- Corporate TravelTravel Expense and Reporting SupportBusiness travel expense support: clean invoices, tracked ticket credits and trip summaries that help finance reconcile spend without chasing receipts.
- Corporate TravelCorporate Travel Policy DesignCorporate travel policy design for growing companies: clear rules on booking, cabin class, hotels and approvals that control cost without frustrating travelers.
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