Per diems

  • 5 minutes

The employee per diem that is provided by your company must be specified. Because per diems are typically used to cover expenses such as meals, accommodation, and other incidental expenses, you can build guidelines that your company provides for per diem allowances. The per diem might depend on the time of year, the travel destination, or both.

When you evaluate a per diem clause, you can specify that a portion of the per diem rate is withheld if a worker receives free meals or services. You can also determine per diem rate thresholds and set the minimum and the maximum number of hours that are added to a worker's travel by the per diem rate.

A graphic showing how a per diem is disbursed to an employee and then used for expenses.

Implement per diems

You must make several decisions regarding the implementation of per diems.

Ask yourself the following questions when making decisions regarding the implementation of per diems.

Default per diem rules for the first and last days:

  • What is the minimum number of hours that an employee can claim for a day and still receive a per diem?
  • Is a reduction in the amount offered for meals for the first day and last day? If a reduction occurs, what is the percentage of the reduction?
  • Is a reduction in the amount offered for a hotel for the first day and last day? If so, what is the percentage of the reduction?
  • Is a reduction in the amount offered for other expenses that incurred on the first day and last day? If so, what is the percentage of the reduction?

Default per diem rules:

  • Is a percentage reduction offered in the per diem allowance for each meal if, for example, the meal is complimentary? If a reduction is offered, what is the reduction percentage for each meal?

  • Is the meal reduction calculated for each day, for each trip, or is it calculated by the number of meals each day?

  • Should per diem amounts be rounded in the regular manner or rounded up?

  • Are per diems calculated on 24 hours or a calendar day?

    Screenshot of the Expense management parameters page.

Per diem rules that are based on location:

  • Do per diem rates vary according to location? What locations are included?
  • If per diem rates vary according to location, for each location, what percentage amount is provided for the following types of expenses?
    • Meals
    • Hotel
    • Other expenses