138-56: State Employee Per Diem and Travel Reimbursement

North Carolina reimburses state employee per diem and travel expenses under Chapter 138 of the General Statutes, paying the IRS business mileage rate (72.5 cents per mile in 2026) plus daily subsistence caps of $81.00 in-state and $93.00 out-of-state, with lodging taxes paid on top of the cap.¹² The rules that actually get claims paid, though, are the ones on when lunch counts, who has to approve what in advance, and the 30-day filing window. Section 138-6 is the statute that governs officers and salaried employees paid through the State Treasurer.

Mileage for Personal Vehicle Use

When you drive your own car for state business, North Carolina reimburses at the IRS business standard rate, which is 72.5 cents per mile for 2026.² The statute ties the state rate to whatever the IRS publishes each January, so the number moves automatically without the General Assembly acting.¹ Tolls come on top of mileage. Parking fees do too, with receipts.³

Distance is measured from your duty station or your point of departure, whichever is closer to the destination. Leave from home on a Saturday and drive to a training three hours away? If your office is closer to the training than your house is, the state measures from the office.³

Commuting is never reimbursable. Driving between home and your regular duty station during normal work hours is a personal expense regardless of distance.¹ If you drive from home to a temporary work site and then to your office, only the segment beyond your normal commute qualifies.

Subsistence: Lodging and Meals

The base subsistence caps are $81.00 per day for travel inside North Carolina and $93.00 per day for travel outside the state. Lodging taxes, sales taxes, and service fees are paid on top of the cap and do not eat into the daily allowance.¹

You can shift dollars between the lodging portion and the meal portion within the daily total. If the hotel runs above the lodging allocation but you spend less on food, the claim still works as long as lodging plus meals stays at or below the daily maximum.

Every two years, the Director of the Budget recalculates the caps against the Consumer Price Index for All Urban Consumers. The adjusted rates take effect July 1 of odd-numbered years, so the figures in force for the 2025–2027 biennium may differ from the statutory base.¹ Check the Office of State Budget and Management for the current adjusted numbers before filing.

When Lunch Is Reimbursable

This is the rule that trips up more employees than any other. Being out of the office over lunchtime does not make lunch reimbursable. The statute limits lunch reimbursement to three situations:⁴

You are in overnight travel status for the trip.
The cost of the lunch is bundled into a registration fee for a formal conference or assembly involving participants from multiple agencies.
You are a member of, or providing staff support to, a state board or commission, and the lunch is preplanned as part of the full meeting.

A day trip across the state that does not involve an overnight stay generally will not qualify unless it fits one of those categories. Each meal must be listed individually on the reimbursement request with departure and arrival times. Tips on meals are already inside the meal allowance and are not separately reimbursable.³

Partial-day travel gets prorated rather than paid at the full daily cap. The Director of the Budget publishes the proration criteria, including which meals qualify based on your departure and arrival times.⁴

The 30-Day Filing Deadline and Documentation

Reimbursement requests must be submitted within 30 days after the travel period ends. Miss the window and the claim can be rejected no matter how well documented it is.¹

Lodging requires a receipt from the commercial establishment itself. A credit card statement showing a hotel charge is not enough; the hotel receipt is what the statute expects.⁵ You also need receipts for parking, tolls, airfare, and other transportation costs.³

Convention registration fees are reimbursed at the actual amount paid, but only with a valid receipt or invoice.¹ If meals were already included in that fee, you cannot claim separate meal reimbursement for the same meals. Auditors look for that duplication specifically.³

Out-of-State Travel and Over-Cap Costs Need Prior Approval

Reimbursement for travel outside North Carolina requires authorization in the manner prescribed by the Director of the Budget, which generally means approval before the trip.¹

When actual costs exceed the statutory caps, § 138-7 allows reimbursement above the maximum if the department head grants prior approval. The Director of the Budget publishes uniform standards for these overages, which are generally limited to extraordinary hotel or meal charges arising from required official business.⁶ Prior is the operative word. Retroactive approval for overspending is treated differently by agencies and is not a substitute.

Tax Treatment of Your Reimbursement

Reimbursements that follow the rules of an IRS accountable plan are not taxable income. The IRS requires a business connection, substantiation to the employer within a reasonable time, and return of any excess reimbursement.⁷ North Carolina’s receipt requirements and statutory caps are structured to meet these criteria.

Two situations produce taxable pay anyway. First, meal reimbursement outside overnight travel status: the IRS treats those payments as compensation, and the agency must withhold federal and state income tax and FICA, so the deposit is smaller than the face amount.³ Second, any amount above the applicable federal per diem rate. If a department head approves an over-cap payment under § 138-7, the portion above the federal rate becomes wages subject to employment taxes for both you and the agency.⁸

State Board and Commission Members Are Treated Differently

If you serve on a state board, commission, committee, or council and are not a salaried state employee, § 138-5 governs your pay rather than § 138-6. You receive a flat $15.00 per day of service, with a $50.00 cap available to members of certain boards who forfeit outside wages to attend meetings.⁵ For subsistence and mileage, § 138-5 points to the same rates set for state employees under § 138-6, so the caps and IRS mileage rate above apply to board members as well.

Fraudulent Claims

Inflated mileage, fabricated receipts, or trips that never happened are not treated as paperwork errors. Under federal precedent, a travel voucher that is even partially fraudulent can taint the entire claim, so the full amount may be denied and recouped rather than just the fraudulent portion.⁹ North Carolina’s embezzlement statute for public officers can reach situations where a state employee misappropriates funds entrusted to them, and travel reimbursement fraud can fall within that scope. Traffic and parking fines incurred during state travel are always your personal responsibility and never reimbursable.³

1
North Carolina General Assembly. North Carolina General Statutes 138-6 – Travel Allowances of State Officers and Employees
2
Internal Revenue Service. The Standard Mileage Rates and Maximum Automobile Fair Market Values Have Been Updated for 2026
3
OSBM. Budget Manual
4
North Carolina General Assembly. North Carolina Code 138-6 – Travel Allowances of State Officers and Employees
5
North Carolina General Assembly. North Carolina Code 138-5 – Per Diem and Allowances of State Boards
6
North Carolina General Assembly. North Carolina General Statute Chapter 138 – Salaries, Fees and Allowances
7
Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
8
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
9
U.S. GAO. Entitlement to Reimbursement of Travel Expenses