Per Diem

What is Per Diem?

Per diem, Latin for “for each day,” is a set daily allowance that employers provide to employees to cover living expenses such as meals, lodging, and incidentals while traveling for business. Rather than requiring employees to submit individual receipts, per diem simplifies expense management by offering a flat rate.

Why Per Diem Matters

Per diem rates may follow federal guidelines, such as those published by the U.S. General Services Administration, or be set internally by the employer. Amounts often vary by destination to reflect differences in the cost of living. When per diem payments stay within approved government rates, they are generally not considered taxable income, making them a straightforward and tax-efficient way to reimburse travel costs.