What is per diem? A plain-language guide for business travelers

Multiply the approved daily rate by each eligible travel day. Federal GSA tables list separate lodging and M&IE amounts by locality; IRS transportation rates use a single daily M&IE figure for qualifying over-the-road drivers.

Employees and contractors who travel away from home overnight for business may receive per diem when their employer or client policy allows it. Tax deductibility has separate IRS rules about tax home and substantiation.

Not always. A stipend can be a fixed payment regardless of trip length. Per diem is usually tied to specific travel dates and destinations—and may follow accountable-plan or GSA-style caps.

GSA publishes federal CONUS locality rates used for government travel and many private accountable plans. The IRS sets special transportation industry meal amounts for eligible truck drivers—different tables and eligibility rules.

Lodging per diem covers overnight accommodation up to the locality cap. M&IE (meals and incidental expenses) is a separate daily amount for food and small incidentals. Employers may reimburse one, both, or actual costs per policy.

Reimbursements under a qualifying accountable plan are often tax-free when you substantiate time, place, and business purpose. Amounts above policy limits or paid without required documentation may be taxable wages.

Your employer pays a fixed daily amount for eligible travel expenses—usually meals and incidentals, and sometimes lodging—instead of reimbursing every receipt. You keep any unused portion only if your plan allows it; many policies require returning excess amounts.

You may receive up to $100 for each eligible travel day toward covered costs (often M&IE, or a combined allowance if your policy rolls categories together). Compare that figure to federal GSA M&IE for your destination and to your actual meal costs.

A $30 daily rate is usually a partial meal allowance or one meal tier (for example dinner only), not full federal M&IE for a city. Check whether the amount is per day, per meal, or before taxes.

That often signals a generous combined lodging-and-meals cap or a high-cost market policy. Compare it to GSA lodging plus M&IE for your trip ZIP—$200 may be below, at, or above federal benchmarks depending on the city and season.

Per diem simplifies expense reporting and can improve cash flow when rates match real costs. Downsides: if the daily rate is low you pay out of pocket, and tax treatment depends on whether your employer uses an accountable plan and whether amounts exceed policy limits.

It may appear as a separate reimbursement line, advance, or expense payout—not always mixed with hourly wages. Reimbursements under a qualifying accountable plan are often not taxable wages; amounts paid without substantiation or above policy may be taxable and reported on your W-2.