What does the IRS say about per diem?

A per diem rate can be used by an employer to reimburse employees for combined lodging and meal costs, or meal costs alone. Per diem payments are not part of the employee’s wages for tax purposes so long as the payments are equal to, or less than the federal per diem rate, and the employee provides an expense report.

How much per diem is taxable?

Rates vary by location and time of year and are broken down into two categories: lodging and meals and incidental expenses (M&IE). As long as your payments do not exceed the maximum federal per diem rate, they are non-taxable; if per diem payments exceed federal limits, any excess will be taxed as ordinary income.

When to use per diem for tax purposes?

Revenue Procedure 2019-48 PDF, posted today on IRS.gov, updates the rules for using per diem rates to substantiate the amount of ordinary and necessary business expenses paid or incurred while traveling away from home.

Is the hotel’s per diem rate the same as the federal rate?

It is each property’s business decision whether or not to offer the rate. Hotels also may or may not choose to extend the rate to other individuals, such as government contractors. Is the hotel’s GOV rate the same as the federal per diem rate? Hotels sometimes offer a “GOV” rate, which might be different than the federal per diem rate.

Where do I find the per diem rate for ( City / County )?

For more information on non-foreign rates, visit DOD’s Per Diem, Travel, and Transportation Allowance Committee at and foreign rates can be found at How do I find the per diem rate for (city/county, state)?

Is the standard meal allowance acceptable to the IRS?

As long as you use the “actual cost method” and keep all receipts, this should be acceptable to the IRS. The standard meal allowance is the current per diem rate according to location and the GSA. You can look up the rates by going to the GSA website for more information.