Per-Diem Rules and Updates

Keeping good records on business travel can be cumbersome for both employees and the employer. That’s why it’s useful for business leaders to know that an employer may pay a per-diem amount to employees for business travel, rather than reimbursing actual substantiated expenses for lodging, meals and incidental expenses (M&IE).

If the per-diem rate doesn’t exceed IRS-approved maximums, and the employee provides simplified travel records, this form of reimbursement isn’t subject to income or payroll tax withholding and isn’t reported on the employee’s Form W-2.

In general, the IRS-approved per-diem maximum is the same rate paid by the federal government to its workers for approved travel. Since this rate varies based on location, employers may choose to use a simplified “high-low” per-diem, under which they can apply one uniform rate for all “high-cost” areas within the continental U.S., and another uniform rate for all other areas. In its most recent “high-low” simplified per-diem rates, the IRS range for high-cost areas per-diem increased by $7 to $282 ($214 for lodging and $68 for M&IE). The low-cost area per-diem increased by $4 to $189 ($132 for lodging and $57 for M&IE).

Please contact us for more information on per-diem rules and updates.

March 31, 2017