Ameer Randolph
Per diem rates are set by the U.S. General Services Administration (GSA) to reimburse federal employees for travel expenses incurred while on official business trips. These rates are based on factors such as location, time of year, and cost of living. Per diem covers expenses such as lodging, meals, and incidental costs like transportation, including rental cars and fuel. While per diem rates vary, they aim to ensure fair reimbursement for federal employees' travel expenses. This raises the question: does per diem include fuel for rental cars?
| Characteristics | Values |
|---|---|
| Per Diem Definition | Per Diem is an allowance for lodging, meals, and incidental expenses incurred during official travel |
| Reimbursement | The U.S. General Services Administration (GSA) establishes the per diem reimbursement rates that federal agencies use to reimburse employees |
| Reimbursement Rate | Rates are based on location and time of year, with higher rates in large cities and during peak travel seasons |
| Lodging | Hotels in areas with frequent government travel may offer discounted rates equal to the government's lodging per diem rate |
| Meals and Incidental Expenses (M&IE) | Covers all meals, room service, laundry, dry cleaning, pressing of clothing, and fees/tips for service staff |
| Mileage Reimbursement | Employees can use rental cars, personally owned vehicles, or government-owned vehicles and be reimbursed for mileage and fuel costs |
| Privately Owned Vehicle (POV) | Reimbursement rates are available from 10/1/2022 to 09/30/2025 and are based on the location of work activities, not accommodations |
| Exceptions | Per Diem rates for Alaska, Hawaii, and U.S. territories are set by the Department of Defense, while rates for foreign countries are set by the Department of State |
| Trip Duration | For trips over 30 days, Per Diem rates are reduced to 75% of the normal rate, and for trips over 180 days, they are reduced to 55% and require senior-level approval |
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What You'll Learn
Per diem rates are set based on location and time of year
Per diem rates vary by location, with major cities like New York City and Boston typically having the maximum per diem tier of $92 per day. Smaller cities that host substantial business-related travel have per diems that fall between lower tiers ($68 to $80). For example, Tampa and Charlotte have per diems of $80. Per diem rates are also influenced by the time of year, with lodging rates varying by month in response to supply and demand. For instance, the highest lodging per diem in New York City typically coincides with autumn, the season that attracts the most tourists and business travelers.
The GSA sets per diem rates based on contractor-provided average daily rate (ADR) data of local lodging properties. The ADR is a travel industry metric that calculates room sales rental revenue divided by the number of rooms sold. The GSA evaluates these rates to ensure they are fair and equitable, with the authority to establish locality-based allowances for subsistence expenses (lodging, meals, and incidentals). Federal Travel Regulation Chapter 300, Part 300-3, further describes incidental expenses as fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.
Per diem rates are updated annually and become effective on October 1st, the first day of the federal government's fiscal year. The standard rate applies to approximately 2,600 U.S. counties, while nonstandard, location-specific rates apply to about 300 high-cost areas. Rates set by the government are based on the cost of living in a particular city. For example, rates for Alaska, Hawaii, and U.S. territories and possessions are set by the Department of Defense, while rates for foreign countries are set by the Department of State.
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Per diem covers lodging, meals, and incidental expenses
Per diem is an allowance for lodging, meals, and incidental expenses. The U.S. General Services Administration (GSA) establishes the per diem reimbursement rates that federal agencies use to reimburse their employees for subsistence expenses incurred while on official travel within the continental U.S. (CONUS), which includes the 48 contiguous states and the District of Columbia. The GSA breaks down per diem rates into two categories: meals/incidental expense (M&IE) and lodging. The meals and incidental expenses (M&IE) category covers all meals (breakfast, lunch, and dinner), room service, laundry, dry cleaning, pressing of clothing, and fees and tips given to people who provide services, such as food servers and luggage carriers. The lodging category covers establishments that offer overnight stays, such as hotels, motels, inns, resorts, and apartments.
Per diem rates are set based on contractor-provided average daily rates (ADR) data of local lodging properties. The properties must be fire-safe and have a FEMA ID number. The ADR is a travel industry metric that divides room sales rental revenue by the number of rooms sold. All rates are evaluated to ensure that they are fair and equitable in the GSA and Office of Management and Budget approval process. Per diem rates are also based on an area's cost of living. Rates in large cities, such as Chicago, New York, and Los Angeles, are higher than in non-metropolitan areas because goods and services in larger cities are generally more expensive. Lodging rates can also vary by month in response to supply and demand. For example, the highest lodging per diem in New York City coincides with autumn, the season that attracts the most tourists and business travelers.
The Federal Travel Regulation Chapter 300, Part 300-3, under Per Diem Allowance, describes incidental expenses as fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. The M&IE rate does include taxes and tips in the rate, so travelers will not be reimbursed separately for those items. On the first and last day of travel, federal employees are only eligible for 75% of the total M&IE rate for their temporary duty travel location. Per diem rates are updated annually and become effective on October 1, the first day of the federal government's fiscal year.
If a federal employee cannot find a room within the established per diem rates, the travel policy allows the agency to reimburse the actual hotel charges up to 300% of the established per diem rates. In addition, if lodging is not available at the temporary duty location, the agency may authorize the maximum per diem rate of up to 300% of the per diem for the location where lodging is obtained. Rates for Alaska, Hawaii, and U.S. territories and possessions are set by the Department of Defense, while rates for foreign countries are set by the Department of State.
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Per diem reimbursements are provided for federal employees
The per diem reimbursement covers expenses for lodging, meals, and incidental expenses. The GSA breaks down per diem rates into two categories: meals/incidental expense (M&IE) and lodging. The M&IE category includes all meals (breakfast, lunch, and dinner), room service, laundry, dry cleaning, pressing of clothing, and fees and tips given to service providers such as food servers and luggage carriers. The lodging category covers hotels, motels, inns, resorts, and apartments.
Per diem rates vary by location and time of year. For example, major cities like New York City and Boston typically have higher per diem rates, such as the maximum per diem tier of $92 per day. On the other hand, smaller cities with substantial business-related travel have lower per diem rates, ranging from $68 to $80 per day. Lodging rates can also fluctuate monthly in response to supply and demand. For instance, the highest lodging per diem in New York City typically occurs during the autumn tourist and business travel season.
It is important to note that per diem rates are not mandatory for hotels or lodging properties to honour. Hotels have the discretion to offer the federal per diem rate or their own "GOV" rate, which may differ. Federal employees are responsible for knowing the federal per diem reimbursement rates and should not assume that the hotel's GOV rate is the same. Additionally, if a federal employee cannot find accommodation within the established per diem rates, the agency may reimburse the actual hotel charges up to 300% of the standard per diem rate.
Per diem reimbursements also cover incidental expenses, which include fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Other acceptable incidental expenses are transportation costs, such as rental car mileage, tolls, parking fees, and taxi or public transit fares used for business travel. Internet/WiFi, business calls, and other communication device expenses incurred during the business trip may also be reimbursed. It is important to note that expenses must be described as "ordinary and necessary" and may not include lavish items.
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Per diem rates are updated annually
The GSA breaks down per diem rates into two categories: meals/incidental expenses (M&IE) and lodging. The M&IE category covers all meals, room service, laundry, dry cleaning, pressing of clothing, and fees and tips given to service providers such as food servers and luggage carriers. The lodging category includes hotels, motels, inns, resorts, and apartments. Per diem rates vary by location and time of year, with rates in large cities like New York, Los Angeles, and Chicago being higher than in non-metropolitan areas due to the higher cost of living.
The GSA sets per diem rates based on contractor-provided average daily rate (ADR) data of local lodging properties. The ADR is a travel industry metric that calculates room sales rental revenue divided by the number of rooms sold. All rates are evaluated to ensure fairness and equity in the GSA and Office of Management and Budget approval process. The GSA has the authority to establish the system of reimbursing federal employees for subsistence expenses under 5 U.S.C § 5702.
The standard rate for per diem applies to approximately 85% of counties in the continental United States. However, if a federal agency requests that the standard rate is inadequate for a specific area, the GSA will study the locality and may designate it as a "non-standard area," which has a different rate. Non-standard areas (NSAs) are frequently travelled by the federal community and are reviewed annually. The rates for the upcoming federal government fiscal year are typically announced in mid-August.
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Per diem rates vary by location and time of year
Per diem rates are set by the General Services Administration (GSA) for federal employees travelling within the Continental US (CONUS), which includes the 48 contiguous states and the District of Columbia. The GSA breaks down per diem rates into two categories: meals/incidental expenses (M&IE) and lodging. The meals and incidental expenses (M&IE) category covers all meals (breakfast, lunch, and dinner), room service, laundry, dry cleaning, pressing of clothing, fees and tips. The lodging category covers hotels, motels, inns, resorts, and apartments.
Per diem rates are set based on contractor-provided average daily rate (ADR) data of local lodging properties. The ADR is a travel industry metric that divides room sales rental revenue by the number of rooms sold. All rates are evaluated to ensure fairness and equity in the GSA and Office of Management and Budget approval process. Per diem rates are updated annually and typically come into effect on October 1, the first day of the federal government's fiscal year.
The U.S. Department of Defense (DOD) establishes rates for travel in non-foreign areas outside of CONUS, which includes Alaska, Hawaii, and U.S. territories like Puerto Rico and Guam. Foreign rates are set by the State Department.
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Frequently asked questions
Per Diem, meaning 'per day' in Latin, is an allowance for lodging, meals, and incidental expenses incurred while on official travel.
Per diem rates do not include fuel for a rental car. However, fuel costs for a rental car can be reimbursed separately.
Per diem rates are set based on the average daily rate (ADR) of local lodging properties. The ADR is a travel industry metric that divides room sales rental revenue by the number of rooms sold.
Yes, per diem rates vary by location and time of the year. Rates in large cities are generally higher than in non-metropolitan areas due to the higher cost of living.
The U.S. General Services Administration (GSA) sets the per diem rates for federal employees traveling within the continental U.S. (CONUS). The Department of Defense sets rates for travel in non-foreign areas outside of CONUS, such as Alaska, Hawaii, and U.S. territories.
