What Are Per Diem Rates in 2026?

What Are Per Diem Rates?

Your coworker just got back from a business trip and mentioned she “came out ahead” on per diem. What does that even mean?

Here’s the deal: instead of saving every coffee receipt and submitting a 47-line expense report, some companies just give you a flat daily amount for meals and lodging. Spend less than that? Keep the difference. That’s per diem—Latin for “per day.”

For 2026, the standard federal rate is $166/day ($107 for your hotel, $59 for food and incidentals). Going to San Francisco or New York? The rate jumps to $375–$391 because everything costs more there.

Why this matters to you

Per diem is tax-free up to federal limits (per IRS rules). And if you’re frugal—eating cheap and booking modest hotels—you can actually make money on business trips. Your coworker wasn’t kidding.

The GSA sets these rates annually. Your company might use them directly, or they might have their own policy. Either way, you should know what the federal numbers are.

2026 Per Diem Rates: The Numbers

The Standard Rate (Most of the U.S.)

This is what you get in most places—small cities, suburbs, anywhere that isn’t expensive.

High-Cost Cities (Where It Gets Interesting)

If you’re traveling somewhere expensive, the rates go up significantly:

Pro tip: Some cities have seasonal rates. Ski towns are higher in winter. Beach towns are higher in summer. Always check the GSA site for your specific dates.

Alaska, Hawaii, and Territories

These are higher because everything costs more:

• Hawaii: $285–$385 (Honolulu is expensive)
• Alaska: $166–$400+ (varies wildly by location)
• Puerto Rico: $174–$256
• Guam/Virgin Islands: $190–$210

International Travel

International rates are set by the State Department, not GSA, and they’re usually higher. London is $555/day. Paris is $506. Tokyo is $458. Check the State Department’s DSSR before international trips.

How to Calculate Your Per Diem

Let’s do the actual math so you know what to expect.

A Real Example: 4-Day Chicago Trip

You’re flying to Chicago on Monday, working Tuesday and Wednesday, flying home Thursday.

Your per diem: $738.50 for a 4-day trip.

The Travel Day Catch

First and last days are usually 75% of the M&IE rate. Why? You’re not eating three full meals at your destination on travel days. Some companies do 100%; check your policy.

When Meals Are Provided

Going to a conference with lunch included? Your company will probably deduct about 30% from your M&IE for that day. Dinner included too? Another 40–50% off. The free food isn’t really “free”—it just shifts who’s paying.

What Does Per Diem Actually Cover?

This is where people get confused—and sometimes get in trouble.

Lodging (The Hotel Part)

Your hotel, motel, Airbnb, whatever. Most companies reimburse actual cost up to the per diem max, and you’ll still need to submit a receipt. The per diem rate is the ceiling, not a guaranteed payout.

Meals & Incidentals (The M&IE Part)

This is the part where you might “come out ahead.”

What’s included:

• Breakfast, lunch, dinner
• Tips for restaurant servers
• Tips for hotel staff and porters
• Laundry (on trips 4+ nights)

What’s NOT included:

• Transportation (flights, rental cars, Uber)
• Alcohol (unless it’s part of a meal—even then, grey area)
• Entertainment
• Business expenses like printing or shipping

Day Trips (No Overnight)

Driving somewhere for the day but not staying overnight? Some companies give you a small incidentals-only per diem—usually around $5. Don’t expect much.

Per Diem vs Actual Expense: Which Is Better?

Per diem is better when:

• You’re a frugal traveler who can eat cheap
• You hate paperwork
• It’s a short, routine trip

Actual expense is better when:

• You’re traveling somewhere expensive with no matching per diem rate
• It’s a long trip (30+ days) where you’d lose money on per diem
• You have unusual expenses the per diem doesn’t cover

Is Per Diem Taxable?

This is the good news: per diem up to federal rates is tax-free. It doesn’t show up on your W-2. The IRS doesn’t consider it income.

But there’s a catch. If your company pays you more than the federal rate, the excess is taxable. So if the GSA rate is $166 and your company gives you $200, that extra $34 gets taxed like regular wages.

What you need to do:

• Document your travel dates, locations, and business purpose
• Return any unused per diem if your trip gets shortened
• Keep records in case anyone asks

What your employer needs to do:

• Follow an “accountable plan” (business connection, documentation, return of excess)
• Report any per diem above federal rates as wages on your W-2
• Not pay payroll taxes on per diem up to federal rates

State-Specific Considerations

Some states have their own per diem rates (California, New York, Massachusetts). If you’re a state employee, those might apply. If you work for a private company, they’ll probably just use federal rates—it’s simpler for taxes.

A few state quirks to know:

• California: Strict meal and rest break laws apply even when traveling
• New York: Specific timing requirements for expense reimbursements
• Illinois: Extra documentation requirements for expense deductions

When in doubt, your company’s travel policy is what matters. Federal rates are just the benchmark.

Tips for Getting the Most Out of Per Diem

If you’re the employee:

• Check GSA rates before you travel—know what you’re entitled to
• Be frugal. The difference between what you spend and what you get is yours to keep
• Save your lodging receipt even if you don’t need meal receipts
• Submit promptly. Most companies have 30–60 day windows
• Combine with mileage reimbursement if you’re driving

If you’re the employer:

• Document your policy clearly—GSA rates or custom rates
• Define how you handle first/last travel days (75% M&IE is standard)
• Process reimbursements within 30 days. People need that money.
• Track who’s traveling where to stay compliant

Sources

• U.S. General Services Administration (GSA) – FY 2026 Per Diem Rates
• U.S. Department of State – International per diem (DSSR)
• IRS Publication 463 – Travel expense and accountable plan requirements

Frequently Asked Questions

What are 2025 per diem rates?

Standard rate is $166/day ($107 lodging + $59 meals). Big cities are higher—San Francisco is $391, NYC is $375. Always check GSA.gov for your specific destination.

How is per diem calculated?

Full rate for each complete day at your destination. First and last days are usually 75% of the meal allowance. If meals are provided, deduct those portions from your daily amount.

Is per diem taxable?

No, as long as it’s at or below federal rates. Anything above the federal rate is taxable income.

Can I keep the difference if I spend less?

Usually yes—that’s the whole point. You get a flat amount for meals; what you don’t spend is yours. But check your company’s policy; some do it differently.