Jackson Reed
When travelling for work, employees may be entitled to a per diem allowance to cover meals and incidental expenses. Per diem is Latin for 'for the day' and is a daily allowance for travel expenses. Meals provided by a common carrier or a complimentary meal provided by a hotel do not affect per diem rates. However, if a continental breakfast is offered as part of a travel event, the per diem must be reduced by the appropriate allowance amount. This is because per diem rates are broken down by breakfast, lunch, dinner, and incidental expenses.
| Characteristics | Values |
|---|---|
| Definition | Per Diem means "For the Day" in Latin |
| Meals Included | Breakfast, Lunch, Dinner, and Incidental Expenses |
| Incidental Expenses | Tips, Porters, Baggage, Laundry, Travel between Lodging and Meal Places, etc. |
| Per Diem Rate | Based on location and meal type |
| Receipts | Not required for per diem meals |
| Meal Deductions | Meals provided by a conference, hotel, event, etc. must be deducted from the per diem |
| Exceptions | Meals on airlines or continental breakfasts included in hotel stays are not deducted |
| Reimbursements | Actual meal amounts reimbursed with receipts, not exceeding per diem rates |
| Tax Exemptions | Lodging taxes are reimbursable as a miscellaneous expense for federal travelers in CONUS |
| GSA Standard Rate | Applicable to approximately 85% of counties in the continental US |
| Review Process | GSA reviews and updates standard and non-standard areas annually |
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What You'll Learn
Meals included with registration or lodging
When meals are included with registration or lodging expenses as part of a package, the meal must be deducted from the per diem. If a continental breakfast or reception is offered as part of the travel event and the food/timing is sufficient to serve as a meal, the per diem must be reduced by the appropriate allowance amount.
For example, if a continental breakfast is provided at a hotel in New York City, the per diem is reduced by the allowable rate for breakfast in that city. The per diem is also reduced by the provided meal's portion of the per diem, followed by a 75% pro-rating of the balance. This reduction is calculated automatically by Emburse Enterprise, where the user simply checks the meal that was provided.
The per diem includes meals and is broken down by breakfast, lunch, dinner, and incidental expenses (I&E). Incidental expenses include payments for bellhops, personal phone calls, laundry, travel between lodging and meal locations, and other individual needs. The per diem must correspond to the location specified for the overnight lodging.
The per diem is paid only when traveling on official overnight business travel. The meal per diem rates are destination-based, and travelers may not claim meals provided by a conference or third party. However, meal payments are not required to be reduced or eliminated due to meals served on airlines or for continental breakfasts included in hotel stays.
In some cases, a traveler may not need to reduce their per diem for meals provided during travel. For example, if a traveler has medical restrictions and a conference is unable to accommodate their needs, the traveler is not required to deduct the applicable meal allowance from the per diem. However, they must explain these details in the comments section of Emburse Enterprise.
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Breakfast, lunch, dinner breakdown
Per diem, meaning "for the day" in Latin, refers to the daily allowance paid to cover meals and incidental expenses when travelling for official business purposes. The per diem rate varies according to the location of travel, with different rates for counties within the US and foreign countries. The per diem covers breakfast, lunch, and dinner, as well as incidental expenses such as tips, baggage fees, and personal phone calls.
The per diem for meals is typically reduced when meals are provided as part of a conference, hotel stay, or travel package. However, there are exceptions to this. Meals provided by a common carrier, such as an airline, or a complimentary continental breakfast provided by a hotel, do not require a reduction in the per diem. In these cases, travellers can claim the full per diem amount for that meal.
When meals are provided as part of a conference or hotel package, travellers must reduce their per diem by the appropriate allowance for that meal. This reduction is calculated automatically by systems such as Emburse Enterprise, where travellers simply need to check which meals were provided. On travel departure and return days, the per diem is reduced by the provided meal's portion, followed by a 75% pro-rating of the balance.
The process for claiming per diem reimbursements varies. In some cases, travellers may be reimbursed for meals without providing receipts, especially when claiming at the destination meal per diem rate. In other cases, travellers may need to provide itemized receipts showing food and beverages ordered, as well as proof of payment. For group travel, a travel leader can purchase meals for the group and submit itemized receipts for reimbursement.
It is important to note that per diem rates and reimbursement policies may differ based on the organization and location of travel. Some states, such as Washington, calculate per diem meal amounts using different methodologies. Additionally, per diem rates for US territories and foreign countries are set by the Department of Defense and the Department of State, respectively.
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Per diem localities
Per diem, meaning "for the day" in Latin, is a systematic methodology that establishes the maximum per diem rates for federal travel customers. Per diem localities with county definitions include all locations within the corporate limits of the key city, as well as the boundaries of the listed counties. This includes independent entities within these boundaries, unless they are listed separately.
When a government-related facility or military installation is located across multiple city or county boundaries, the per diem rate for the entire facility is the higher of the rates that apply to the cities or counties. Per diem rates are based on the average daily rate (ADR) data of local lodging properties, which must be fire-safe and have a FEMA ID number.
The standard rate applies to about 85% of counties in the continental United States. If a federal agency requests that the standard rate is inadequate to cover travel costs in a specific area, the GSA will study the locality to determine if it should become a "non-standard area." The GSA reviews and updates standard and non-standard areas annually.
Meals and incidental expense (M&IE) breakdowns are provided for federal travelers who need to deduct meals furnished by the government or included in a registration fee. Meals provided by a common carrier or a complimentary meal provided by a hotel do not affect the per diem. For M&IE rates greater than $265, 15%, 25%, and 40% of the total are allocated to breakfast, lunch, and dinner, respectively.
In terms of meal reimbursements, travelers must be in travel status during the meal period to claim it. For instance, a traveler who departs home at 8:15 am cannot claim breakfast that day. Reimbursements for the last day of travel are based on the rate for the location where the traveler last spent the night. Travelers may not claim meals provided by a third party, except for continental breakfasts included in hotel stays.
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Meals provided by a third party
When meals are included with registration or lodging expenses as part of a package, the per diem rate must be reduced by the appropriate allowance amount for that meal. For example, if breakfast is provided at a meeting, the per diem rate for breakfast is deducted. This also applies to meals provided on a travel departure or return day, where the per diem is reduced by the meal's portion of the per diem, followed by a 75% pro-rating of the balance.
It is important to note that travelers may not claim meals provided by a third party, such as a conference or hotel. However, there are exceptions to this rule. For instance, meal payments do not need to be reduced or eliminated for meals served on airlines or for continental breakfasts included in hotel stays.
In terms of reimbursement, it is recommended to reimburse travelers at destination meal per diem rates rather than claiming actual meal expenses. Actual meal amounts may not exceed per diem rates per person, including tax and tip. A travel leader can purchase groceries and/or restaurant meals for the group and submit itemized receipts for reimbursement.
To summarize, when meals are provided by a third party, the per diem rate must be adjusted accordingly. This includes meals provided by conferences, hotels, or as part of a package. However, there are exceptions for meals provided by common carriers or complimentary hotel meals, which do not affect the per diem rate. Reimbursement for meals is typically based on the destination's meal per diem rates, and actual meal receipts may not exceed the per diem rates.
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Incidental expenses
When employees are travelling or conducting business, companies may set a per diem rate for incidental expenses. This means there is a daily limit to reimbursement, which varies by region and is set by different government bodies depending on the location. For example, the General Services Administration sets the rates for destinations within the continental US, while the Department of Defense sets rates for non-foreign locations like Alaska, Hawaii, and Puerto Rico.
The per diem rate for incidental expenses is meant to cover the costs of meals, lodging, and other necessary expenses incurred while on business travel. This rate can be deducted from taxes by the employer, but there are limitations. Since changes to tax law in 2018, most individuals can no longer deduct unreimbursed employee expenses from their taxes. However, certain professionals, including Armed Forces reservists, performing artists, and some state and local officials, are still eligible to deduct some incidental expenses using Form 2106.
It is important for employees to keep detailed records of their incidental expenses and submit expense reports with receipts as proof of payment. This ensures compliance with company procedures and facilitates the reimbursement process. Additionally, when employees pay for incidental expenses out of their own pocket, the reimbursement should be made through a stand-alone check to clearly distinguish it from taxable income.
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Frequently asked questions
Yes, continental breakfasts are included in per diem rates. However, if the continental breakfast is included in a hotel stay, it does not need to be deducted from the per diem.
No, per diem meals do not require receipts. However, actual meals claimed require itemized receipts showing food and beverages ordered, along with proof of payment.
Yes, the meals and incidental expense (M&IE) rate includes taxes and tips. Therefore, travellers will not be reimbursed separately for these items.
Yes, if meals are provided during travel, such as at a hotel or on an airplane, the per diem must be reduced by the provided meal's portion. This deduction is calculated automatically by Emburse Enterprise.
No, travellers may not claim meals provided by a third party, such as a conference. However, meals served on airlines or as part of hotel stays, including continental breakfasts, are exempt from this rule.
