How Does Per Diem Pay Work?

[rajivkumar]

Hi everyone,
I’ve been hearing a lot about per diem pay, especially in travel-based and contract roles, but I’m not fully sure how it works. From what I understand, per diem covers daily expenses like meals, lodging, and travel — but does it count as taxable income?

 

[isabel]

Per diem pay is a daily allowance that employers pay you to live, eat, or travel when you are out of home working and it is generally not taxable provided that you are using the IRS sanctioned rates and maintain adequate records.

 

[Gsusangrey]

Per diem, which means "by the day" in Latin, is a daily stipend given to staff members to cover lodging, meals, and other incidentals when traveling for work. The requirement to provide thorough receipts for each expense is replaced by a set, streamlined rate.

 

[Sophie]

Per diem pay is the salary that the employers pay their employees daily to enable them to cover their travelling expenses including food and accommodation. It is not normal pay and is normally tax free as long as it is not excessively above the set government limits.

 

[peterkavinsky]

Per diem pay is a daily allowance that employers give to workers to cover travel-related expenses such as meals, lodging, and incidentals. Instead of reimbursing individual receipts, companies provide a fixed daily rate, making the process simpler and faster. Per diem rates often follow government guidelines, and employees must be traveling for work to qualify. It helps reduce out-of-pocket costs for workers and streamlines accounting for employers.

 

[nikhilrajoria]

Per diem provides a per day allowance on food, shelter or transportation when they are on work tours. It is normally tax free where regulations are observed and receipt is not necessary.

 

[Mayank]

Per diem pay is a daily allowance provided to employees for work-related expenses like meals, lodging, and travel. It is usually a fixed amount, tax-free if it meets IRS guidelines, and reimburses costs without requiring detailed receipts.