Per Diem Calculator 2025

Frequently asked questions

• What does per diem mean?

  “Per diem” is a Latin term meaning “per day,” and it refers to a daily allowance or payment — usually, one that companies provide to employees or individuals for travel expenses (e.g., lodging, meals, and incidentals) incurred while on a business trip. The per diem rate clarifies and standardizes what employees can spend, which helps streamline a company’s expense management process.

• Is per diem taxable?

  That depends. Several factors determine the taxability of per diem payments for business travel, including whether the per diem payments exceed the federal per diem rate for the location. However, the rules around taxation can be complex and affect the company’s expense management process, so it’s always a good idea to consult a tax professional and the IRS regulations around per diem payments.

• Who sets per diem allowances?
  While the U.S. government sets a federal per diem rate for travel expenses, organizations may have their own rules for determining per diem allowances for business travel. Considerations often include where the employee is traveling, as well as the policy for the specific employee.
• When is per diem required to be paid?
  Companies are not required to pay a per diem for business travel. However, it is common practice for organizations to provide a per diem that covers an employee’s travel expenses — e.g., hotel, meals, and incidentals — when on a business trip.
• Does per diem count as income?
  As with the tax regulations around per diem payments for business travel, several factors determine whether they count as income. These considerations include how the per diem is administered and whether it complies with IRS guidelines.
• Is there a standard per diem meal allowance?
  Yes, there is a standard per diem meal allowance when an employee is engaged in business travel. The General Services Administration (GSA), a branch of the U.S. federal government, sets this rate for federal employees traveling within the continental U.S. (The standard is different for Alaska, Hawaii, and U.S. territories, as well as other countries.) Many companies will use the GSA’s per diem rates for meal allowances as a guideline for setting their own.
• How do you calculate per diem?
  While companies usually set their own per diem rates for business travel, they often use the GSA’s per diem rates as a benchmark. The rate varies depending on the date and location in which the travel expense was incurred. Consult your company’s expense management team to determine what your particular per diem will be for a business trip.
• Is per diem required by law?
  A per diem is not required by law; however, many companies provide one to cover employee expenses while engaging in business travel. Some companies may provide a flat per diem payment to the employee, while others may reimburse employees for the amount they spend. This practice helps simplify and streamline the expense management process for companies, but companies are not legally required to offer a per diem.
• What is the per diem rate for meals?
  The official per diem rate for meals, which varies by location, is set by the GSA and updated every year. It includes specific rates for breakfast, lunch, and dinner, and it may be prorated when an employee is only spending part of a day in a location. Many companies will use the GSA’s per diem rates for meal allowances as a guideline for setting their own.