Annual Per Diem Rates Released

The IRS with the GSA (General Services Administration) updates their per diem rates annually. The rate changes begin in October of each year, or the employer may elect to implement the new rates on a calendar year instead. There are times when the rates are updated due to extenuating circumstances or after a supplemental review. 

The new rates can be found here in the GSA’s interactive map, and the High/Low alternative changes can be found here in this IRS notice.

What are Per Diems?

When employers like staffing agencies, reimburse for lodging and meals, instead of tracking actual expenses, they will often use the per diem method of reimbursement. Under this method, the per diem paid is treated as the actual expenses so long as, (1) the rate does not exceed the published amount, and (2) the employer can reasonably prove that the recipient will incur away-from-home lodging and meal expenses. Practically, it is a receipt substitute.  

Whether these payments are taxable is a second question. This is based on vetting the employee for a valid tax residence and likelihood of incurring the expenses for lodging and meals at a temporary work location away from their tax residence.