However, per diem for a hotel is calculated by the number of reserved nights. Is Per Diem per Day or Night?įor meals, transportation, and incidental expenses, per diem is calculated per day. You can also use the General Services Administration’s (GSA) per diem calculator if you use federal per diem rates.Īs an alternative, you can choose to pay one flat rate per day for all high-cost locations and a separate flat rate for all low-cost locations (what the IRS calls the “high-low method” see IRS Publication 463, Chapter 6). ($200 x 2 nights) + ($50 x 3 days) = $550 total employee reimbursement Here’s what your per diem calculation will look like: Multiply the per diem rate by the number of eligible travel days.įor example, your company reimburses 200 dollars per night for a hotel and 50 dollars a day for meals when an employee attends a three-day convention.Determine how many days of travel are eligible for per diem expense prepayment or reimbursement.Use your company (or federal) per diem rates.To calculate the per diem pay for traveling employees: Learn More Today! How Is Per Diem Pay Calculated on Travel Days? Using fixed per diem rates eliminates the need for standard record keeping and simplifies the reimbursement process because employees don’t need to submit receipts to the accounting department. Per diem rates are based on the location employees travel to rather than the amount of money they spend. Per diem rates are fixed amounts of money employers give their employees for daily expenses.
Some employers pay per diem up front, and some reimburse employees after the trip is over. While employers aren’t legally required to reimburse employees for travel expenses, it’s considered good business practice for employers to reimburse employees for these additional travel costs. What Is Business Travel Per Diem?Įmployees traveling for business incur additional expenses outside of travel costs, like lodging and meals. Per diem, meaning “for each day” in Latin, is a set amount of money an organization gives an employee each day to cover expenses while traveling for business.
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