How to Calculate Per Diem: Rates, Travel Days, and Taxes

To calculate per diem, look up the federal lodging and meals-and-incidentals (M&IE) rates for your destination, pay the full lodging rate for each night you stay, apply 75 percent of the M&IE rate on your departure and return days, and apply 100 percent on every full day in between. Then subtract the allocated value of any meals someone else provides. For fiscal year 2026, the standard rate for most locations in the continental United States is $110 per night for lodging and $68 per day for M&IE, with roughly 300 higher-cost cities carrying larger allowances.¹

Find the Right Rate for Your Destination

The General Services Administration sets per diem rates for the continental United States each fiscal year, which runs October 1 through September 30.² For FY 2026, the baseline that applies to any location not individually listed is $110 for lodging and $68 for M&IE.¹ The roughly 300 non-standard areas carry M&IE tiers between $68 and $92, reflecting local costs.

Look up your destination by city and county on the GSA website. The rate is tied to where you perform your work, not necessarily where you sleep. If you lodge in a cheaper town nearby, your agency can approve the rate for that alternate location when it saves money.³

For travel outside the continental United States, the Department of State publishes separate rates for foreign countries and U.S. territories, listed by country and city.⁴

Gather Your Trip Details

Every calculation starts from a few facts about the itinerary:

The calendar dates you leave home and arrive back.
The exact destination city and county, since rates vary by location rather than by state.
The number of nights you actually stay, since lodging reimbursement is per night, not per day of travel.
Any meals furnished by a conference, host, or agency, which reduce your M&IE for that day.

Your expense report needs the date, place, and business purpose of the travel. Under an accountable plan, the per diem rate itself satisfies the substantiation requirement for the amount of your meal expenses, so individual meal receipts aren’t required.⁵ The same holds for lodging paid through a lodging per diem, though many employers require hotel bills anyway as internal policy.

How Travel Days Are Counted

The 75-Percent Rule for First and Last Days

Departure and return days aren’t treated as full days. Under the Federal Travel Regulation, you receive 75 percent of the applicable M&IE rate on each.⁶ The reduction is automatic. It doesn’t matter whether you leave at 6 a.m. or 6 p.m.

Every full day between departure and return qualifies for 100 percent of the M&IE rate. Lodging is not affected. You get the full lodging allowance for each night you stay, regardless of whether it falls next to a partial travel day.

The 12-Hour Minimum

Short trips have a threshold. If your travel lasts more than 12 hours but less than 24, you receive 75 percent of the M&IE rate for each calendar day in travel status.⁶ Trips under 12 hours generally don’t qualify for any M&IE reimbursement. A seven-hour round trip to a nearby city earns nothing under federal rules, even if you bought lunch on the road.

Work Through the Calculation

Suppose you travel Monday through Thursday to a destination with a $110 lodging rate and a $79 M&IE rate.

Lodging. You check in Monday night and check out Thursday morning. That’s three nights at $110 each, or $330.

M&IE on partial days. Monday (departure) and Thursday (return) each pay 75 percent of $79, which is $59.25. Combined: $118.50.

M&IE on full days. Tuesday and Wednesday are full travel days at 100 percent of $79, or $158 total.

Add them: $330 + $118.50 + $158 = $606.50. That figure goes on your expense report.

Multi-City Trips

When a trip covers multiple destinations with different rates, use the rate for the location where you perform work each day. If you work in Denver in the morning and fly to San Francisco in the afternoon, the applicable M&IE rate shifts with your location. The lodging rate follows where you actually spend the night. Run the calculation separately for each segment and add the results.

Subtract Meals Someone Else Provides

When a meal is furnished, whether through a conference registration fee, a government event, or your agency, you subtract that meal’s allocated value from your M&IE for the day.³ GSA publishes a breakdown of how each M&IE tier splits across breakfast, lunch, dinner, and incidentals. At the standard $68 M&IE rate, the deductions are $16 for breakfast, $19 for lunch, and $28 for dinner. At the top $92 rate, they rise to $23, $26, and $38.⁷

Two exceptions matter. A complimentary breakfast at your hotel, the standard continental spread, doesn’t count as a furnished meal, so you keep your full M&IE. Meals served by airlines or other common carriers don’t count either. Both are treated as incidental to the service you already paid for.

On partial travel days the deduction still applies, but it cannot push your allowance below the incidental portion. If a conference provides lunch on your departure day, you subtract the lunch amount from the already-reduced 75 percent M&IE, but you never owe money back. The floor is the incidental amount.

What Per Diem Covers, and What It Doesn’t

The M&IE portion bundles meals with incidental expenses, and the federal definition of incidentals is narrower than most travelers assume. It covers only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.⁸

That leaves a lot of common travel costs outside per diem. Business phone calls, internet fees, taxis, parking, and dry cleaning on longer trips aren’t covered by the daily allowance. Those are reimbursed separately through your employer’s expense process, with receipts. Confusing the two categories can delay reimbursement or create tax problems later.

The High-Low Simplified Method

Private-sector employers can skip the location-by-location lookup by using the IRS high-low method, which sorts all CONUS locations into two buckets: high-cost cities and everywhere else.⁵

For travel from October 1, 2025 through September 30, 2026, the high-cost per diem is $319 per day (including $86 for M&IE), and all other locations receive $225 per day (including $74 for M&IE).⁹ The IRS publishes an annual list of high-cost cities. Under this method an employer checks whether the destination is on that list, applies the corresponding flat rate, and stops there.

When Per Diem Becomes Taxable Wages

Per diem escapes taxation when two conditions are met: the payment doesn’t exceed the applicable federal rate, and you file a timely expense report showing the date, place, and business purpose of the travel.¹⁰ The report must be submitted within 60 days of finishing the trip. When both conditions hold, the reimbursement qualifies under what the IRS calls an accountable plan, and the money never appears on your W-2.¹¹

The IRS treats per diem as wages in several situations:

No expense report is filed, in which case the entire amount is taxable.
The expense report is missing the date, place, amount, or business purpose.
The employer pays a flat travel amount with no reporting required. Those payments are wages from the first dollar.
The payment exceeds the federal rate. Only the excess is taxable, not the full amount.¹⁰

If You’re Self-Employed

Self-employed travelers can use per diem rates, but with a limit: the per diem method applies only to meals, not lodging. You deduct actual lodging expenses based on receipts.¹⁰ For meals, you can use the M&IE-only rate for your destination instead of tracking every receipt. For FY 2026 that’s $68 to $92 per day under the regular method, or $74 to $86 under the high-low method.

The meal deduction is still subject to the standard 50 percent limit on business meals. If you claim the $68 standard M&IE rate for a travel day, your actual deduction is $34. You still record the dates, destinations, and business purpose of the trip. The per diem simply replaces the pile of lunch receipts.

Long Assignments at One Location

Extended stays at a single duty station often trigger reduced rates, on the theory that a long stay lets you find cheaper lodging and cook rather than eat out. Federal agencies generally apply reductions after 30 to 60 consecutive days at the same location, with thresholds and percentages set by agency policy. Some agencies cut the rate to 50 percent of lodging and M&IE after 60 days and to 25 percent after 120. Private employers set their own long-stay policies, but the same idea drives them.

1
Federal Register. Maximum Per Diem Reimbursement Rates for the Continental United States (CONUS)
2
U.S. General Services Administration. Per Diem Rates
3
eCFR. 41 CFR Part 301-11 – Subsistence Expenses
4
U.S. Department of State. Per Diem Rates
5
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
6
eCFR. 41 CFR 301-11.101 – What Allowance Will I Be Paid for M&IE
7
U.S. General Services Administration. M&IE Breakdowns
8
eCFR. 41 CFR 300-3.1 – What Do the Following Terms Mean
9
Internal Revenue Service. 2025-2026 Special Per Diem Rates
10
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
11
eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements