Per Diem Allowance

Companies will sometimes provide their employees with a per diem allowance to cover food, lodging, incidental expenses, and sometimes the travel itself. They give their employees this allowance instead of paying the employee’s actual expenses.

What Is per diem allowance?

A per diem allowance is a set amount an employer gives to their employees to use for their lodging, food, and incidentals for work-related travel. This allows employees to cover their travel expenses without having to use their own funds.

The General Services Administration (GSA) is the agency that sets the maximum per diem rates for each category every fiscal year. The GSA bases these rates on local market costs. Federal employees use these rates when traveling for work purposes. The Internal Revenue Service also uses the rate to determine what, if any, portion of a non-government employee’s travel reimbursement or allowance will be taxed.

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How per diem allowance works

Most businesses reimburse an employee for the amount they expect the travel to cost. The employee will receive the reimbursement once they complete their trip and they have filed an expense report.

Although, in some cases, employers give employees the allowance before the trip. If the employer reimburses the employee after the trip, they often provide the reimbursement through a credit card, check, or expense report.

You will need to keep your receipts for your travel claim. If your employer does not pay more than the federal per diem rate, and you file an expense report within 60 days and return any unused money, the allowance should not be included in your wages. The expense report must include the following.

• The business purpose for the trip
• The place and dates for the trip
• Any receipts for lodging, if the meals-only per diem is being used

What is the per diem allowance 2024?

The amount of the per diem allowance varies considerably depending on the area of travel and the month. For example, the per diem rate for lodging in New York City in March of 2024 is $258. In contrast, the per diem rate for lodging in Boise, Idaho, for the same time period is $165.

You might also be wondering, “what is the standard per diem meal allowance?” This allowance is allotted for meals during travel for work and also varies by area. There is an amount allotted for each meal. For breakfast in New York, the per diem allowance for 2024 is $18. In Boise, Idaho, it is $17. The rate for incidentals is the same for both cities, at $5 per day.

You can find all the per diem allowances for 2024 on the U.S. General Services Administration website.

When you can receive a per diem allowance

Employees can receive a per diem allowance to cover travel expenses if their employer chooses to give this allowance. However, businesses are not required to provide this allowance. In fact, businesses only have to cover an employee’s travel expenses if failing to do so would cause the employee to earn less than the minimum wage.

However, most employers will offer a per diem allowance whenever travel is necessary, and it is always worth asking.

If you want to learn more about mileage reimbursement for your day-to-day business-related driving with a personal vehicle, read through the IRS mileage guide we have prepared, explaining the rules and requirements for mileage reimbursement in the US.

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