Calculating Per Diem Rates

There is no required per diem rate for employee expenses during travel for private employers, with the exception of government contractors. Whether, and in what amount, to offer a daily allowance for traveling employees while they are on the road should be set by company policy. In addition to calculating per diem rates, organizations may decide what expenses will and will not be covered. Most commonly, the per diem is used to cover just meal expenses or meals and lodging.

The per diem amount may be set as one rate that will always be used by the company or it may be adjusted based on the destination. Typically we see daily limits ranging from $25-$80, depending on company preferences and whether any meals will be comped. The U.S. General Services Administration has a per diem section on their website, which shows per diem amounts that must be used by federal employers and federal contractors. However, it also provides a helpful starting point for other organizations in coming up with a reasonable per diem amount.

While the per diem is optional for traveling employees in the private sector, there are many rules around when travel time must be paid; a per diem will not take the place of that compensation.

For more information on how GTM helps businesses with this and other HR issues, contact us at (518) 373-4111.