There will be an update to per diem rates effective beginning October 1st.
First, let me offer some background. If you have employees that incur frequent business travel, it can often be cumbersome for those employees (and perhaps for the chief accountant) to accumulate receipts for reimbursable expenses paid by the employee. As an alternative, tax rules allow for a flat employee reimbursement amount for each day an employee is traveling for business. That flat rate is based on the location of the business travel and has a lodging component and a meals and incidental expenses component.
The per diem rates are not required if it is preferred to reimburse employees for actual expenses. However, if business travel reimbursements are a frequent occurrence, many employers find the per diem rates to be a convenient alternative to collecting and retaining receipts substantiating actual expenses. The only record that needs to be retained is the time, place and business purpose of the travel. Provided this standard is met, a per diem reimbursement is not subject to income/payroll tax withholding, nor is it includible on the employee’s W-2.
You can search the per diem rates for specific locations at GSA.gov. You can also see that these rates tend to vary by season (for example, Gulf Shores is a more expensive destination in the summer months that in any other time of year). If the travel location is not listed, then use a standard rate of $142 per day ($91 for lodging and $51 for meals and incidental expenses).
If you have any questions or would like more information regarding per diem allowances or travel expenses, please don’t hesitate to contact us – (205)871-1880 or firstname.lastname@example.org.