Per diem expenses are daily allowances that companies give to an individual employee or contractor to cover costs pertaining to living, travel, or food while away from home for reasons related to his/her job. Per diem expenses are not considered payroll and hence are not taxed as general income.
The General Services Administration (GSA) sets the rules for what can qualify as per diem expenses. Per diem expenses only qualify for employees who are actually traveling for work; a meal with a client a block outside the office does not count. Although there is no specific minimum mile requirement, it is generally understood based on IRS rules that spending on qualifies for per diem when an overnight stay is required.
Since a meal in NYC is much more expensive than an equivalent meal in say, Oklahoma City, the GSA has different per diem meal and incidental tiers for different cities. To see what the per diem rates are by geographic location, visit the GSA’s per diem portal. These rates are typically adjusted yearly to account for inflation and other price fluctuations. The current average US per diem is $91 for lodging and $51 for meals and incidentals.
Frequently, employees / contractors incur these expenses on their personal card, then submit a detailed expense report along with supporting receipts to be reimbursed by the company at some later date.
Emburse simplifies the per diem process greatly to reduce paperwork and increase transparency on expenses. First, Emburse provides the ability to set and adjust card budgets in real time based on the cardholder’s travel needs. Second, Emburse provides an accurate, real-time list of transactions per card.