Define: Per Diem

Per diem refers to a daily allowance or payment provided to cover expenses incurred while traveling or working away from home. This allowance typically includes expenses such as meals, lodging, transportation, and incidental costs. Per diem rates may vary depending on the location and purpose of the travel, and they are often established by employers, government agencies, or organisations based on standard rates or guidelines. Per diem payments are designed to simplify expense reimbursement and provide employees or travellers with a fixed amount to cover their daily costs, without the need for detailed expense reporting. They are commonly used in business travel, government work, and certain industries where employees frequently travel for work-related purposes.

A per diem is a daily allowance for expenses.

For instance, many municipalities will pay a meagre per diem to individuals serving jury duty. The per diem is common in business, where the employer picks up expenses of an employee. The per diem is especially common with employees who are travelling on business. For instance, the US federal government sets a standard per diem for all government employees travelling on business. One per diem is given for lodging and another per diem for meals and all other incidental expenses. The per diem varies by location. The US federal government per diem for Manhattan in the first 4 months of 2005 was up to $177 per night for lodging and up to $51 per day for meals and incidental expenses. Many companies set either a small per diem or have none at all, paying most expenses directly by issuing a corporate charge card to the employee instead.

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This glossary post was last updated: 29th March 2024.