Government Per Diem Rates: Coverage, Employer Use, and Limits

Government per diem rates set a fixed daily allowance for lodging, meals, and incidental expenses on official travel. For fiscal year 2026, the standard rate across most of the continental United States is $178 per day, made up of $110 for lodging and $68 for meals and incidentals.¹ These rates apply directly to federal civilian employees, and private employers routinely adopt them because the IRS treats payments at or below the federal rate as a tax-safe way to reimburse business travel.

The FY2026 Standard Rate and Where Higher Rates Apply

The General Services Administration publishes CONUS per diem rates each fiscal year, effective October 1 through September 30. For FY2026, the standard CONUS rate is $110 per night for lodging and $68 per day for meals and incidental expenses (M&IE).¹ That standard rate covers about 85% of counties in the lower 48 states and the District of Columbia.²

About 300 locations qualify as non-standard areas with higher rates reflecting local hotel and food costs.³ New York City, San Francisco, and Washington, D.C. are consistently among the most expensive. Some popular destinations also carry seasonal rates that rise during peak months and drop during slower periods.

What the Lodging and M&IE Portions Cover

The lodging portion covers the room rate at a hotel, motel, or similar accommodation. It does not include taxes. Within the continental U.S. and non-foreign locations outside CONUS, lodging taxes are reimbursed separately as a miscellaneous travel expense.⁴

The M&IE portion is a flat daily amount. You receive it regardless of whether your actual food costs are higher or lower. The incidental expenses component is narrower than most people assume. Under federal travel regulations, it covers only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.⁵ Laundry, dry cleaning, and phone calls are not incidentals under this definition. The incidental allowance across all current M&IE tiers is $5 per day.⁶

Meal-by-Meal Breakdown

GSA publishes a meal-by-meal breakdown for each M&IE tier. This matters because travelers must deduct individual meal amounts when meals are provided free of charge. The current CONUS tiers are:⁶

$68 total: Breakfast $16, Lunch $19, Dinner $28, Incidentals $5
$74 total: Breakfast $18, Lunch $20, Dinner $31, Incidentals $5
$80 total: Breakfast $20, Lunch $22, Dinner $33, Incidentals $5
$86 total: Breakfast $22, Lunch $23, Dinner $36, Incidentals $5
$92 total: Breakfast $23, Lunch $26, Dinner $38, Incidentals $5

When a conference registration fee includes lunch, a traveler at the $68 tier subtracts $19 from that day’s M&IE claim. Federal employees must make this deduction whenever the government provides a meal or a registration fee covers one.⁷

Partial Days and Single-Day Trips

The first and last days of a trip are treated differently. Federal regulations reduce the M&IE allowance to 75% on these transition days, regardless of what time you depart or return.⁸ At the standard $68 tier, that comes to $51 on departure and return days. Full days in between are reimbursed at 100%.

For single-day trips, a 12-hour minimum applies. Travel lasting more than 12 but fewer than 24 hours qualifies for 75% of the applicable M&IE rate.⁹ A day trip under 12 hours earns no M&IE at all. The 75% reduction affects only the meals-and-incidentals portion, not lodging or other travel expenses.

Which Agency Sets Which Rates

Three federal entities divide responsibility by geography:¹⁰

GSA sets rates for the 48 contiguous states and the District of Columbia.
The Department of State sets rates for foreign countries.
The Department of Defense sets rates for non-foreign areas outside the continental U.S., including Alaska, Hawaii, and U.S. territories.

All three agencies review and update their rates annually. So if your trip is to Honolulu or San Juan, the applicable rate is not on GSA’s CONUS table.

How Private Employers Use Federal Rates

Private employers are not bound by GSA rates, but many adopt them because the IRS treats federal per diem as a safe harbor for substantiating business travel. Revenue Procedure 2019-48 lets businesses reimburse employees at or below the federal rate and treat those payments as fully substantiated without collecting individual meal receipts.¹¹ The payments stay non-taxable to the employee and deductible for the employer, provided the plan meets IRS requirements.

The Accountable Plan Requirement

For per diem to stay off the employee’s W-2, it must be paid under what the IRS calls an accountable plan. Three requirements apply: the travel must have a business connection, the employee must substantiate the time, place, and business purpose of the trip, and any excess payment must be returned.¹² When per diem is paid at or below the federal rate, the amount is deemed substantiated, so meal receipts aren’t required. The employee still has to document where they went, when, and why.

If a plan fails any of the three tests, the IRS treats the entire payment as taxable wages subject to income tax withholding and employment taxes.¹³

Paying More Than the Federal Rate

Employers can pay whatever per diem amount they choose. Any amount exceeding the applicable federal rate is treated as taxable wages subject to income tax withholding and FICA.¹³ Staying at or below the federal rate is what keeps the whole payment tax-free, and it’s the main reason so many companies peg their travel policies directly to GSA rates.

The High-Low Method

Many private employers simplify further by using the high-low method, which sorts every CONUS destination into two buckets instead of tracking hundreds of city-specific rates. For the period beginning October 1, 2025, the high-cost rate is $319 per day ($233 lodging, $86 M&IE), and the rate for all other locations is $225 per day ($151 lodging, $74 M&IE).¹⁴ The IRS publishes a list of designated high-cost localities each year.

An employer that starts the calendar year using the high-low method must stick with it for all employees through the end of that year. Switching mid-year between high-low and the regular per diem method for the same employee is not permitted.

Limits for the Self-Employed and Company Owners

Self-employed individuals can use per diem rates only for meals and incidentals, not for lodging.¹⁵ A freelancer or sole proprietor must keep actual lodging receipts and deduct the real cost. The M&IE per diem remains available as a simplified alternative to tracking every meal.

Employees who own 10% or more of the business (measured under the related-party rules of IRC Section 267(b)) cannot use the high-low substantiation method. These related employees must use either actual expense records or the location-specific GSA rates.

The One-Year Rule for Long Assignments

Per diem qualifies for tax-free treatment only when the travel assignment is temporary. Under IRS guidance, an assignment is temporary if it is realistically expected to last one year or less and actually does last one year or less.¹⁶ Once an assignment is expected to exceed one year, the work location becomes the employee’s tax home, and per diem payments become taxable wages.

The critical word is “expected.” If a six-month project turns into a 14-month project, per diem becomes taxable from the date the expectation changed, not from the one-year anniversary. Companies sending workers on extended projects should monitor assignment length and adjust withholding as soon as the timeline shifts.

Recordkeeping You Still Have to Do

Per diem simplifies expense tracking but doesn’t eliminate documentation. Four elements must be recorded for every trip:¹⁷

Time: dates of departure and return, and the number of business days at the destination.
Place: the city or locality of travel.
Business purpose: why the trip was necessary or what business benefit was expected.
Amount: the actual cost of lodging and transportation.

Federal employees face an additional layer: they must provide a lodging receipt and a receipt for any authorized expense over $75.¹⁸ If a receipt is unavailable, the employee must explain why to the agency’s satisfaction. Private sector employees using per diem under an accountable plan can skip individual meal receipts but still need to document the four elements above and keep lodging receipts when claiming actual lodging costs.

1
Federal Register. Maximum Per Diem Reimbursement Rates for the Continental United States (CONUS)
2
U.S. General Services Administration. Per Diem Boundaries
3
U.S. General Services Administration. Per Diem Rates
4
eCFR. 41 CFR 301-11.16 – Lodging Tax Reimbursement
5
eCFR. 41 CFR 300-3.1 – What Do the Following Terms Mean
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U.S. General Services Administration. M&IE Breakdowns
7
eCFR. 41 CFR 301-11.21 – Allowable M&IE Reimbursement When Meals Are Provided
8
eCFR. 41 CFR 301-11.20 – Meals and Incidental Expenses (M&IE) Reimbursement Amounts
9
eCFR. 41 CFR 301-11.20 – Meals and Incidental Expenses (M&IE) Reimbursement Amounts
10
U.S. General Services Administration. Per Diem Rates FAQs
11
Internal Revenue Service. Rev. Proc. 2019-48
12
Office of the Law Revision Counsel. 26 U.S. Code 62 – Adjusted Gross Income Defined
13
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
14
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
15
Internal Revenue Service. Per Diem Rates Frequently Asked Questions
16
Internal Revenue Service. Rev. Rul. 99-7
17
eCFR. 26 CFR 1.274-5A – Substantiation Requirements
18
eCFR. 41 CFR 301-11.25 – Must I Provide Receipts to Substantiate My Claimed Travel Expenses