Employers in Ireland can pay employees per diems as compensation for the expenses incurred whilst on a business trip. Per diems are not considered part of an employee’s pay and are, thus, tax-free up to a certain allowed amount. The allowed amounts differ whether it is a business trip within Ireland or abroad.
Domestic business trips
The employer can either reimburse the actual expense of travel to the employee or reimburse a fixed daily allowance.
In case the employer chooses to reimburse the actual expense of travel, all of the following conditions must be met:
- the employee incurred the expenses wholly, exclusively and necessarily when carrying out the duties of their work;
- the expenses were reimbursed based on vouched receipts
It is important to note that the employee may decide to personally claim expenses and allowances reflecting the actual costs incurred by them. Where this happens and you have reimbursed their expenses, the amounts paid by you will be treated as taxable salary.
Fixed daily allowance
There is a maximum daily allowance the employer can reimburse tax-free. These maximum amounts are based on the Civil Service rates and can be found on their website.
Domestic overnight subsistence rates (between 1 December 2021 and 31 August 2022):
|Normal rate (up to 14 nights)||€147.00|
|Reduced rate (covers the next 14 nights)||€132.30|
|Detention rate (covers each of the next 28 nights)||€73.50|
|Vouched Accommodation rate – Dublin only||Vouched cost of accommodation up to €147.00||plus||€39.08|
Domestic overnight subsistence rates (from 1 September 2022):
|Normal rate (up to 14 nights)||€167.00|
|Reduced rate (covers the next 14 nights)||€150.30|
|Detention rate (covers each of the next 28 nights)||€83.50|
|Vouched Accommodation rate – Dublin only||Vouched cost of accommodation up to €167.00||plus||€39.08|
Additional notes on the overnight allowance for domestic business trips:
- The overnight allowance covers an overnight assignment of up to 24 hours;
- The period of daily allowances at one location is limited to 6 months;
- This must be at least 100 kilometres from the employee’s home and their usual place of work.
Domestic day subsistence rates (from 1 December 2021):
|Period of assignment||Rate|
|Between five and ten hours||€16.29|
|Ten hours or more||€39.08|
Additional notes on the day allowance for domestic business trips:
- The assignment must be at least 8 kilometres from the employee’s home or normal place of work;
- You can only claim a day and overnight allowance if you work five hours or more the next day.
Business trips abroad
There is a maximum daily allowance the employer can reimburse tax-free. These maximum amounts are based on the Civil Service rates and can be found on their website. They differ per destination country as stated in Circular 07/2017.
Short term assignment
Subsistence rates for short term assignments (2022):
|Period of assignment abroad||% of normal overnight rate|
|Second and third month||75%|
|Fourth, fifth and sixth month||50%|
These rates can be used for a single temporary assignment of up to 6 months where the employee is working abroad.
Long term assignment
A long term assignment means an assignment of longer than 6 months.
For the first month of the assignment, the employer can pay subsistence for the overnight rate. This is to facilitate the employee to find self-catering accommodation. For the remainder of the assignment, the employer can pay subsistence costs and a portion of the ten-hour day rate. The subsistence cost can cover the cost of reasonable accommodation. The employer can pay 50% of the day rate (ten-hour) for the location.