What is a per diem?

A Per diem is a daily allowance employee can get from their employers to cover expenses (generally meals and lodging) when on a business trip. This means that instead of submitting individual expense receipts for reimbursement, the employee will receive a fixed allowance to spend per day of their trip.

Per diem rates vary by location because of the cost of living associated with their destination. Additionally, it’s important to highlight that most jurisdictions do allow the use of Per Diems, but every jurisdiction has its own regulations and maximum amounts of non-taxable daily allowances. Companies can decide to abide by these maximum amounts, or not. If they decide to grant higher

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daily allowances than the government-set rates, the surplus is counted as the taxable income of the employee. Please refer to our dedicated country pages to see the local expense compliance rules that may apply to you. Please be aware that this site is informational only, and many external factors, unique to your company might apply.

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