Per Diem Allowance

A per diem allowance is a structured method of reimbursing employees for business travel by providing a predetermined daily amount for expenses such as lodging, meals, and incidentals. Instead of tracking individual costs, travelers receive a fixed sum based on location and trip duration.

Government agencies and companies often follow official per diem rates, like those set by the U.S. General Services Administration (GSA) or IRS, to ensure fairness and compliance. High-cost cities typically have higher allowances, while smaller towns have lower rates. This approach helps businesses control costs, streamline reporting, and maintain budget consistency, while allowing employees flexibility in spending within the allowance.