Per Diem

HRManager

Can anyone tell me exactly - what is per diem? Is it different things in different industries?

bsa

Latin for "by the day". It is frequently used to describe an amount of money to cover expenses "for the day" or event.

HRManager

I knew that much. But, what kind of expenses does it cover? For example, personal meals?

Mike Maslanka

be careful...per diem and the flsa are dangerous ground...the 5th circuit recently ruled in a case on this---i will try to get you the name...mike

HRManager

Thanks, it seems the more I learn, the more I don't know:) I would appreciate any help I can get. Is this Federal or can it change depending on what State you are in?

Brad Forrister

Per diem doesn't have any specific legal meaning for private employers. It means whatever you define it to mean for your company. You should probably be guided by your industry, but it's not required.

For some companies it covers meals, hotel expenses. If the employee wants to stay at a more expensive hotel and eat at McDonalds, or stay at Motel 6 and eat at Morton's, comes out the same. Mileage or plane fare is usually separate.

You should, of course, make sure that whatever you do complies with FLSA, per Mike's warning.

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

HRManager

Where would I find out about the FSLA laws? Are you saying, for example, I give my employee $50 per day when he is on site. If he buys lunch for himself, pop, parking, that this should come out of the per diem amount? Do they need to supply receipts for the per diem purchases?

San Francisco

In my company, when we are traveling for business purposes, we have per diem only for meals - a specified amount that should be spent for the day's meals. Anything over the per diem must be approved by a manager. Hotels, rental cars etc are left to our discretion. To receive reimbursement, an expense report is completed and sent to our expense department along with all receipts for payment directly to the employee.

Elizabeth

HRManager

I guess I still have a question. One of my people turned in receipts for incidentals, such as pop, breakfast, parking, taxis and also still took the per diem check. If he is not using it for such things, what can I do?

San Francisco

I guess that I am confused. If the check was enough to reasonably cover all expenses, then can't you take the submitted receipts simply as proof that he used his per diem? And does'nt the company need this "proof" for tax purposes?
We are reimbursed only what we actually spend regardless of the amount allowed for meals.

Elizabeth

HRManager

I think this is how it is supposed to work but they have been doing it wrong for years and I am trying to correct it., Seems to me that they either get a per diem check OR turn in their expenses for reimbursement.

HRManager

My people receive A check and don;t have to account for how they spend it

Nurse Recruiter

In my setting (Health Care), Per Diem can also refer to staff who work only when needed. They are paid a higher flat rate and used to supplement regular staff.

NaeNae55

Years ago my hubby worked for the railroad and received a per diem whenever he traveled for them. It was a set amount he received for every day of travel. The amount was the same for every city except San Franscisco (it was much higher for SF). The per diem covered all meals, hotels, and other expenses. The IRS accepted this without needing receipts. It was seen as a way to keep administrative expenses down. So, if hubby ate well and stayed at a very nice hotel, we paid the difference. If he stayed somewhere cheap and ate at McDonald's, we made a little from the trip.

I believe the IRS has standards for per diems rates for various cities with various rates. If your company follows the standards, there will not be a need for receipt documentation or any adjustment to employee's income for tax purposes.

HRManager

Thanks, I will check the IRS web site and see what I can find. Seems to me it is like getting "free money" that the company shouldn't have to put out.

MrCreosote

The GSA site may be useful. It has rates for hotels and meals and incidental expenses. If your per diem rate meets or is below these amounts you are fine. Any amounts above are supposed to be taxable income. If you require receipts the per diem rates don't apply and you don't have to worry about that.

[url]http://www.policyworks.gov/org/main/mt/homepage/mtt/perdiem/perd03d.html[/url]

HRManager

Thanks

blw

The IRS has a publication listing the per deim rates it allows per city for all US cities. This info might be on their web site as well. Quite a few cities have two different rates based on the time of year if it is a city that gets a lot of seasonal travel and rates go up. Such as ski or coastal resort towns.

My husband is self-employed and is out of town alot. It really benefits us not having to track every meal receipt. The IRS allows us to deduct the per diem for each full day out of town (partial days - you have to pro-rate the per diem) without any receipts.