What is per diem pay? “Per diem” is Latin for “per day.” At work, per diem pay usually means a fixed daily allowance an employer gives you to cover meals, lodging and incidental costs while traveling for work. It can also describe a job paid by the day or shift on an as-needed basis, such as a per diem nurse.
What does per diem mean at work?
The term has two common workplace meanings. Context tells you which one applies.
1. Per diem as a travel allowance
Instead of collecting every receipt for meals and small expenses, many employers pay a flat daily amount while you’re on a business trip. For example, a company might pay a set amount per day for meals and incidentals, plus lodging, based on where you travel.
Many employers base their rates on the federal per diem rates set by the U.S. General Services Administration (GSA). Rates depend on the city or county and are updated every October 1. For fiscal year 2026 (October 2025 through September 2026), the standard rate for most of the continental US was $110 a night for lodging and $68 a day for meals and incidentals. Higher-cost cities have higher rates. Look up your destination on the GSA per diem page for the current figures.
2. Per diem as a type of job
In healthcare and some other fields, “per diem” workers are hired to fill shifts as needed rather than on a fixed schedule. They’re often paid a higher hourly rate but may get fewer or no benefits, and their hours aren’t guaranteed.
Is per diem pay taxable?
For travel allowances, the answer depends on how the employer’s plan is set up:
- Accountable plan: if you travel for business, the allowance doesn’t exceed the federal rate and you report the time, place and business purpose of the trip, the per diem generally isn’t taxable income.
- Amounts over the federal rate that you don’t return are generally treated as taxable wages.
- Non-accountable plan: allowances paid without those rules are generally taxable wages.
For per diem jobs, your pay is ordinary wages and is taxed like any other paycheck.
Examples of per diem in emails and messages
Travel policy email: “Employees traveling overnight receive a daily per diem for meals and incidentals. Receipts are not required for meals.”
Expense report note: “Per diem: 3 days × daily meal rate for Denver.”
Job posting: “Per diem RN – flexible shifts, weekend availability required.”
Slack: “Do I still get full per diem on travel days, or a partial rate?”
Per diem vs expense reimbursement
| Per diem | Actual expense reimbursement | |
|---|---|---|
| How it’s paid | Fixed daily amount | Exact amount of receipts |
| Receipts needed? | Usually not for meals and incidentals | Yes |
| If you spend less | You typically keep the difference | You’re reimbursed only what you spent |
| Admin effort | Low | Higher |
Many employers use per diem for meals and reimburse lodging and airfare at actual cost.
How to handle per diem correctly
- Read the travel policy. It explains rates, partial travel days and what’s covered.
- Know if meals are already provided. Some policies reduce per diem when a meal is included in a conference.
- Submit trip details on time. Accountable plans need dates, places and business purpose.
- Return excess amounts if required. Otherwise they may be taxed.
- For per diem jobs, clarify hours and benefits before accepting.
Related terms
See more in our Payroll and Tax hub.
FAQ
What does per diem mean?
Per diem is Latin for per day. At work it usually means a daily travel allowance or a job paid by the day or shift.
Is per diem taxable?
Travel per diem paid under an accountable plan at or below federal rates is generally not taxable. Excess amounts and non-accountable allowances are usually taxable.
Do I need receipts for per diem?
Usually not for meals and incidentals, but you must report the trip’s dates, places and business purpose. Lodging often still needs receipts.
What is a per diem employee?
A per diem employee works on an as-needed basis, picking up shifts without a fixed schedule. It is common in healthcare.
Do per diem workers get benefits?
Often not, or only limited benefits. Many per diem roles pay a higher hourly rate instead. Check the offer details.
Sources
- GSA: Per Diem Rates
- IRS Publication 463: Travel, Gift, and Car Expenses
- IRS Publication 15: Employer’s Tax Guide
This article is general information, not legal or tax advice. Check with a qualified professional for your situation.
