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Travel allowance: A Comprehensive Guide for Employees

• Written by: Rinaily Bonifacio
• Last updated: 11 March 2024

This article will explain travel allowance, when and how you can use it, and tips for getting the most out of your expenses.

Table of contents

What is travel allowance?

How does business travel allowance usually cover, what is a flat travel allowance, what is the daily allowance, easy ways on how companies manage their procedures for business travel allowances, effective communication, how to manage business travel allowances.

Travel allowance is a type of compensation employers provide to cover employee travel expenses incurred when traveling for business purposes. It helps with employee travel costs, such as transportation, lodging, meals, and other incidentals while on the job. Depending on the company policy, travel allowance may be given in cash or as reimbursed expenses.

For example, some companies provide a fixed daily amount for meals and lodging that employees can use during their travels. Other companies cover expenses incurred by employees when they submit receipts after their trip has ended. This is known as per diem allowance or transport allowance.

Business travel allowance typically covers the cost of airfare, hotel accommodations, and meals. It may also include per diem allowances such as ground transportation, parking, and incidentals. The exact coverage will vary depending on the company's policies and the type of business trip.

A flat travel allowance is a set amount of money an employee provides for travel costs. The employee is responsible for managing the funds and ensuring they are used for the intended purpose. This allowance is typically used for short trips or employees who travel infrequently.

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A daily allowance, also known as a per diem, is a set amount of money provided to employees for money incurred daily while traveling for business purposes. It typically covers things such as

• Transportation
• And incidentals.

The allowance amount is usually based on the location and duration of the business trip and is intended to cover living costs for that specific location.

Daily allowances are provided in addition to other travel compensation types, such as lodging or airfare reimbursement. The amount and coverage of a daily budget will vary depending on the company's policies and the nature of the business travel.

Companies can manage their procedures for business travel allowances by establishing clear guidelines and policies. This should include information on who is eligible for the assistance, what travel costs are covered, and how to submit expense reports. Additionally, companies can use travel management software to track and approve payments and ensure company policy compliance.

It is also essential for companies to communicate effectively with employees about travel allowance policies so that they are aware of their rights and obligations. This can include providing training and support and regular updates on any policy changes.

By managing their procedures for business travel allowances in a clear and organized manner, companies can ensure that their employees have the resources they need to complete their business trips while also managing the company's expenses.

Another critical aspect of managing business travel allowances is to keep an eye on the per diem rates and lodging expenses. It is essential to ensure that these expenses are within the budget and are in line with the rates established by the General Services Administration (GSA). Companies should also consider implementing a system for meal allowance and car hire reimbursement, as well as for laundry services, parking fees, and other miscellaneous expenses.

To manage business travel allowances effectively, companies should establish clear guidelines for employees traveling within the continental United States and those traveling to foreign countries. This includes setting a budget for each travel and providing employees with the necessary forms for expense reporting and reimbursement.

In addition, companies can use data analysis to identify trends and patterns in travel expenses. This can help them make more informed decisions about travel policies and budgeting and potentially save money on future trips.

It's also important to consider the needs of business travelers and their families and to establish policies that support them. For example, companies may offer additional allowances for family members traveling with a business traveler or for international travel.

Overall, an efficient reimbursement system and clear travel policies can help ensure that employees are promptly reimbursed for their expenses and that the company's expenses are tracked and managed effectively. This can be a great way to manage business travel allowances and keep costs under control.

Written by:

Rinaily Bonifacio

Rinaily is a renowned expert in the field of human resources with years of industry experience. With a passion for writing high-quality HR content, Rinaily brings a unique perspective to the challenges and opportunities of the modern workplace. As an experienced HR professional and content writer, She has contributed to leading publications in the field of HR.

Please note that the information on our website is intended for general informational purposes and not as binding advice. The information on our website cannot be considered a substitute for legal and binding advice for any specific situation. While we strive to provide up-to-date and accurate information, we do not guarantee the accuracy, completeness and timeliness of the information on our website for any purpose. We are not liable for any damage or loss arising from the use of the information on our website.

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Per diem: Meaning, Calculation, and 2024 Rates

If your employees travel for business, whether it’s internationally or locally, you might consider covering these costs by providing them with per diem pay. Per diems can be a great way to simplify expense management in your business and provide your employees with a predictable daily budget to cover their essential travel expenses.

So, what is a per diem, and what are the government per diem rates for 2024?

This article will explore the meaning of per diem and what businesses need to keep in mind when they calculate business travel expense reimbursements for their employees. We will answer common questions including “What is per diem pay?”, “What is a standard per diem meal allowance?”, and “What are the GSA per diem rates for 2024?”. We will also highlight how using software to centralize your expense management processes can help you streamline expense tracking, simplify your reimbursement procedures, and ensure compliance with per diem policies and regulations.

Per diem meaning

How does per diem work, how is per diem calculated, gsa per diem rates 2024, is per diem taxable.

• FAQ about Per Diem 
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Let’s start with the meaning of per diem.

Per diem, derived from the Latin for “by the day”, is a daily allowance that covers expenses that an employee incurs while traveling or on official business. These expenses include meals, lodging, transportation, and incidental costs incurred during a trip. Traveling employees can spend up to this defined amount each day to cover their essential expenses without expense reimbursement approval.

For example, if an employee is on a business trip and their company provides a per diem rate of $100, it means they are entitled to spend up to $100 per day on expenses related to the trip. Any amount spent beyond this allowance would typically be the responsibility of the employee, while any unspent amount might not be reimbursed.

This system simplifies the out-of-pocket reimbursement process and provides a standard daily allowance so that employees do not need to submit detailed receipts for every individual expense. It is commonly used in the business world, government, and various other organizations that require their employees to travel for work purposes.

What about per diem jobs? What does per diem work mean?

This is a slightly different concept. A per diem job is an employment arrangement where individuals are hired on a day-by-day or as-needed basis, typically without a long-term commitment or fixed schedule. In this type of job, common in industries including healthcare and hospitality, employees are considered temporary or on-call workers, available to fulfill specific duties whenever the employer requires their services. We won’t be focusing on this in today’s article.

We’ve explored the per diem meaning, so now let’s take a look at how it works, exactly.

Per diem rates

Organizations, companies, or governments set per diem rates based on the location of travel and the purpose of the trip. Different places may have different rates due to variations in the cost of living and travel expenses. We’ll expand on this below.

Calculation of per diem

Most organizations determine the per diem amount by considering the following expenses:

• Meals.  Covers breakfast, lunch, dinner, and any incidental snacks.
• Lodging.  Covers the cost of the hotel or other accommodation.
• Incidentals.  Covers small miscellaneous expenses like tips, transportation to and from the airport, or other minor costs.

More on calculations below.

Reimbursement

When an employee goes on a business trip, they can claim an allowance for each day they are away. They usually do not need to provide itemized receipts, as the per diem rate is meant to cover everything. You calculate the total reimbursement by multiplying the PD rate by the number of days spent on the trip.

Total reimbursement also takes the following into account:

• Partial days. For arrival and departure days, when the traveler doesn’t spend the full day away, the daily allowance may be prorated based on the time spent on the trip.
• Non-reimbursable expenses. Some organizations may specify certain expenses that are not eligible for reimbursement. For example, personal expenses or alcohol might not be covered.

Unused per diem

If a traveling employee spends less than the allowance rate on a given day, you might decide to allow them to keep the unused portion of the allowance. However, some organizations require employees to return any excess funds not spent during the trip. Ultimately, though, this will depend on each company’s expense policy.

Accounting and reporting

Finally, accounting and reporting are vital aspects of the per diem system, ensuring accuracy and adherence to the organization’s policies. When employees go on a business trip and incur eligible expenses, they must follow specific procedures for accounting and reporting:

• Expense tracking. Employees must track their expenses during the trip. They must also note any additional costs beyond the fixed per diem rates, such as transportation expenses.
• Per diem reimbursement requests. After the trip, the employee submits a detailed expense report to the finance or HR department. The report includes the trip dates, purpose, destination, and daily expense breakdown.
• Per diem vs. actual expenses. The report distinguishes between per diem expenses and actual expenses, if applicable.
• Receipts and documentation. Depending on each organization’s policies, employees may need to submit itemized receipts as proof of incurred expenses.
• Approval and reimbursement. Finance reviews and approves the report. They then reimburse employees for any eligible expenses.
• Unspent allowances. Employees might retain any unused per diems if expenses were below the allowance. However, this will depend on each organization’s internal policies. The same applies to any excess allowances not used appropriately.
• Auditing and record keeping. Organizations must retain detailed per diem records, receipts, and expense reports. This enables efficient auditing and ensures tax compliance where appropriate.

The best way to manage all the above is by using expense management software tools . The right solution can help you create an efficient per diem request system, and ensure accurate reimbursement and financial transparency. More on this below.

The way you calculate per diem rates will depend on a variety of factors. This includes the location of travel, the purpose of the trip, and the standard cost of living in the area. However, the specific process can vary depending on the organization or government agency setting the rates.

Nonetheless, here’s a general outline of how organizations typically calculate per diems  to give you an idea.

Location plays a crucial role in determining per diem rates. This is because the cost of living, accommodation expenses, and meal costs can vary significantly from one location to another.

Let’s explore some factors related to location in the context of per diem calculation:

• Cost of living. Rates are often higher in cities or areas with a high cost of living. These locations tend to have more expensive meals, accommodation, transportation, and other daily expenses.
• International travel. For international travel, factors such as currency exchange rates, local economic conditions, and cultural factors can affect rates. Governments and organizations may have different rates for various countries to reflect these variations.
• Seasonal variations. Seasonal variations in travel demand can also impact rates. Popular tourist destinations may have higher rates during peak seasons when demand for accommodation and services is at its highest.
• Travel restrictions. Finally, travel restrictions, security concerns, or political stability in certain regions can influence rates. For example, some locations with high-risk factors might have lower rates to discourage unnecessary travel.

Meals and Incidental Expenses (M&IE)

Meals and Incidental Expenses (M&IE) cover an employee’s daily food allowance and minor miscellaneous expenses during business travel. The M&IE rate is typically calculated based on the location and duration of the trip.

Here’s a closer look at what M&IE includes and how it functions:

• Meal expenses. The M&IE portion of a per diem covers expenses related to meals. This includes breakfast, lunch, dinner, and any incidental snacks or refreshments consumed during the day. Per diem rates for meals can vary depending on the time of day and the specific location.
• Standard meal allowances. M&IE rates are often set by the government or organizations based on established guidelines. For instance, the General Services Administration (GSA) in the United States provides standard M&IE rates for various locations within the country, which can change annually to reflect fluctuations in food costs.
• Incidental expenses. Apart from meals, M&IE can also include incidental expenses, which are small miscellaneous costs incurred during the trip. These might include tips for hotel staff, bellhops, or other service providers. They might also include transportation to and from the airport or local business-related transportation expenses.

Federal or standard rates

Federal or standard rates refer to the predetermined per diem allowances established by the government or relevant authorities for specific locations or regions within a country. In the United States, for example, the General Services Administration (GSA) sets the federal per diem rates for various cities and regions. These rates are designed to reflect the average expenses an individual is likely to incur while traveling for official government business.

Federal or standard rates take into account factors such as the cost of living, accommodation, and meal expenses in each location. The government usually updates these rates annually to align with changing economic conditions and travel expenses. As a result, these rates provide a convenient and uniform way for government employers to reimburse employees for their business-related travel without the need for detailed receipts.

While federal or standard rates are typically used for government-related travel, private companies and organizations can also adopt these rates as a reference point for setting their own per diem policies. That way, they can ensure consistency and fairness in their expense reimbursement policies.

Lodging rate

Most organizations calculate the lodging portion of the per diem according to the average cost of accommodation in the area. This usually depends on hotel rates or other approved lodging options.

Total per diem

The total per diem is the sum of the M&IE rate and the lodging rate.

In other words:

Total Per Diem = M&IE rate + Lodging rate.

So, for example, if the M&IE rate for a specific location is $60 per day, and the lodging rate is $100 per day, the total per diem for that location would be $160 ($60 + $100).

Exclusions and adjustments

Some organizations might exclude certain expenses from the per diem, such as travel between the traveler’s home and the destination or expenses related to conferences or events with provided meals.

Per diem reviews and updates

Organizations, companies, or government agencies should regularly review their per diem practices to ensure they remain relevant, fair, and in line with current economic and travel conditions.

This process is crucial because:

• Economic factors, such as inflation, fluctuations in living costs, and changes in travel expenses, can impact per diem rates. Regular review allows you to make adjustments to keep rates up-to-date and reflective of current conditions.
• The cost of living directly influences per diem rates in certain locations. As the cost of living changes over time, you should review your per diem rates regularly to accommodate these shifts.
• Organizations might observe changes in travel patterns, such as shifts in the frequency or destinations of business trips. This information can help you determine whether you need to adjust your per diem rates to match new travel trends.
• Reviewing and updating per diem policies regularly promotes transparency and openness within the organization. This is because employees understand that you are continuously evaluating your rates to meet their needs.
• Finally, for government employees or contractors, per diem rates are usually based on official government guidelines. Periodic review ensures that the organization aligns its rates with any updates or changes in these guidelines.

In the U.S., Federal per diem reimbursement rates are set by the General Services Administration (GSA), in collaboration with the Department of State (DoS), and the Defense Travel Management Office (DTMO). These GSA per diem rates, set on October 1 each year, are used by Federal agencies to reimburse their employees for expenses incurred while on official travel.

GSA per diem reimbursement rates are made up of two components: a maximum lodging allowance and a meals and incidental expenses (M&IE) allowance. The standard per diem rate for most locations within the contiguous United States (CONUS), covering approximately 2,600 counties, is $157 per day. $98 of this is allocated to lodging and $59 to M&IE. However, this fiscal year (FY), there are 316 non-standard areas (NSAs) with per diem rates that are higher than the standard federal per diem rates for 2024.

Since FY 2005, maximum lodging allowances have been determined based on the average daily rate (ADR) concept. ADR is a widely accepted metric in the lodging industry, obtained by dividing a property’s room rental revenue by the number of rooms rented, providing the average rate in a specific area. You can find out more information about how lodging per diem rates are determined from the GSA’s official lodging rates webpage .

Business travel per diems in the United States are either taxable or non-taxable, depending on how your employees use them.

Here’s a breakdown of the tax treatment of per diems in the U.S.:

• Non-taxable. A per diem is non-taxable if it meets certain conditions set by the Internal Revenue Service (IRS). To qualify as non-taxable, the per diem amount must be within the federal government’s standard per diem rates for various locations. The General Services Administration (GSA) publishes these rates annually, as we have just seen above. If the per diem does not exceed the GSA standard rates and it is used for legitimate business travel expenses, it is non-taxable income. Employees are not required to keep detailed records of actual expenses when using non-taxable per diem.
• Taxable. If the per diem you provide employees exceeds the federal government’s standard rates or if it is not specifically tied to business travel, you must treat it as taxable income. Per diem amounts that you pay in excess of the standard rates or those that employees use for non-business-related expenses are taxable wages and subject to regular income tax withholding.
• Accountable plan. To ensure proper tax treatment, many employers use an “accountable plan” for per diem payments. An accountable plan is a set of policies and procedures that meet IRS requirements for reimbursing employees for business expenses. Under an accountable plan, you do not include non-taxable per diem reimbursements in an employee’s taxable income, and you treat any excess amount as taxable.

Centralize expense management with Factorial

In today’s dynamic business landscape, where remote work and travel are increasingly prevalent, an integrated and user-friendly expense management solution is essential. With its comprehensive suite of tools, Factorial provides organizations with a seamless and efficient solution for managing time and expenses associated with business travel.

For example, the platform’s time and expense tracking feature ensures that employees can effortlessly log their travel-related expenses, making it easy to keep an accurate record of expenses throughout their journeys. Plus, by enabling real-time tracking, Factorial empowers both employees and employers to stay informed about incurred costs, ensuring transparency and accountability.

Moreover, Factorial’s user-friendly interface for submitting reimbursement requests further simplifies the expense management process. Not only that, but employees can effortlessly submit their expense reports, saving time and reducing administrative burdens. As a result of this streamlined approval workflow, managers can quickly review and approve claims, allowing for a faster reimbursement process.

One of the standout features of Factorial’s expense management tool is the option for corporate expense cards . With these cards, organizations can issue prepaid cards to employees, simplifying expense tracking and reducing the need for out-of-pocket spending. You can seamlessly integrate the cards into the system, allowing for real-time expense updates and easier reconciliation.

Ultimately, Factorial is a solid solution for businesses looking to optimize their per diem management processes, foster better expense control, and empower their employees to focus on what truly matters – achieving their business objectives. Embrace the power of Factorial’s expense management feature and embark on a journey towards greater efficiency, cost savings, and enhanced productivity.

FAQ about Per Diem

1. what is per diem.

Per diem, a Latin term meaning “by the day,” is a daily allowance to cover expenses incurred by an employee while on business travel or official duties. This allowance typically includes costs for meals, lodging, transportation, and incidental expenses.

2. How does per diem work?

Organizations set per diem rates based on the travel location and trip purpose. Employees are entitled to spend up to this daily limit without needing detailed expense approval. The system simplifies reimbursement by negating the need for submitting individual expense receipts.

3. What expenses are covered by per diem?

Per diem covers:

Meals: Breakfast, lunch, dinner, and snacks. Lodging: Hotel or other accommodations. Incidentals: Minor expenses like tips and local transportation.

4. How are per diem rates calculated?

Per diem rates depend on:

Location: Reflecting local cost of living and travel expenses. Meals and Incidental Expenses (M&IE): Covering daily food and minor expenses. Lodging: Based on average local accommodation costs.

5. How is per diem reimbursement handled?

Employees claim an allowance for each travel day. The total reimbursement equals the per diem rate times the number of days. Organizations may require return of unspent funds or allow employees to keep them, depending on their policy.

6. What are the accounting and reporting requirements for per diem?

Employees must track expenses and submit a report post-trip, detailing trip dates, purpose, and expenses. Organizations review these for approval and reimbursement.

7. Are per diem rates the same for all locations?

No, they vary based on location due to differences in living and travel costs. Organizations often use federal or standard rates as a benchmark.

8. Is per diem taxable?

In the U.S., per diem is non-taxable if it aligns with federal rates and is used for legitimate business expenses. Amounts exceeding standard rates or used for non-business purposes are taxable.

9. How often are per diem rates reviewed and updated?

Organizations should regularly review and adjust per diem rates to reflect economic changes, living costs, and travel patterns.

10. What is an effective way to manage per diem expenses?

Using expense management software like Factorial can streamline per diem management, ensuring efficient reimbursement and financial transparency. Factorial provides time and expense tracking, easy report submission, and options for corporate expense cards.

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Travel Allowances, Mileage and Per Diem Rates

Expenses for travel on official business by University employees are reimbursed at the following rates set by State legislation , the Internal Revenue Service (IRS), the US General Services Administration (GSA), US Department of State and the Department of Defense as applicable.

Transportation by Vehicle

University travelers are encouraged to use a state-owned or leased vehicle through Fleet Services . If a state-owned or leased vehicle is not available, travelers should use the least expensive method of ground transportation to meet their business needs.

When a personal vehicle must be used, the allowable IRS mileage rate, effective Jan. 1, 2024 is:

Mileage reimbursements up to 350 miles (round-trip) are reimbursed at the full IRS rate. For trips which exceed 350 miles, mileage above the first 350 miles is reimbursed at fifty percent (50%) of the full rate. Please refer to 1501.4 – Procedure on Ground Transportation Expenses Including Mileage Rates for more information.

Lodging and Meals (Per Diem)

Per diem is the allowable amount for room and meals based on the destination and dates of travel as detailed below. See 1501.5 – Procedure on Per Diem Rates and 1501.6 – Procedure on Lodging Accommodations for more information.

Reimbursement for lodging may be made only in the amount documented by an itemized receipt of actual lodging expenses from a commercial lodging establishment.

Effective for travel beginning March 1, 2023, the University will now utilize the lodging per diem rates set by the US General Services Administration (GSA), US Department of State and Department of Defense as applicable. Travelers should secure lodging no more than 50% higher than the lodging rates set for their destination and dates of travel. Lodging rates only apply to the nightly room rate charged by the establishment and do not include taxes and fees. Lodging obtained in excess of these rates will require additional information.

For more information on lodging rates, excess lodging and third-party lodging information see 1501.6 – Procedure on Lodging Accommodations .

University travelers are only eligible for meal per diem when they make an overnight trip. Partial day per diem is possible when the partial day is the day of departure or return for a trip, but it must be in conjunction with an overnight trip taken. Reimbursement of meals outside of overnight travel is not permitted.

Tax and tips for meals are included in the per diem rate. The cost of meals included in other related activities (registration fees, conference costs, hotel registration, etc.) may not be duplicated in reimbursement requests.

Effective for travel beginning March 1, 2023, the University will now utilize the per rates set by the US General Services Administration (GSA), US Department of State and Department of Defense as applicable.

For employees, all rates are loaded in Concur and will populate based on the dates and location of travel and the meals selected by the traveler for reimbursement.

For all other travelers:

• Look up the rate based on the destination and dates of travel utilizing the links above.
• First and last day of travel are calculated at 75% of the day’s total rate, regardless of the traveler’s time of departure or time of return.
• If a meal was provided to the traveler and not paid for out of pocket, that meal must be deducted from the full day’s per diem rate. A breakdown of meal rates are included in the links above.
• If meals are provided to the traveler on the first or last day of travel, the 75% calculation is taken first and then the full meal rate is deducted. For example, if dinner is provided on the first day of travel for a location with a $65 per diem rate the calculation will be $65 x 75% = $48.75 – $26 Dinner = $22.75.
• Per diem reimbursement for a given day of travel will never be less than the incidental rate for that day, regardless of the calculations above.

For more information on per diem rates, see 1501.5 – Procedure on Per Diem Rates .

• Travel and Payment Card Services

As a developing country, we have limited resources. We must manage our available resources wisely, minimize waste, and ensure that all our resources are directed at improving the wellbeing of the people, and in fulfilling our national vision. The civil service is tasked with the oversight, management, administration, and disbursement of funds for governance. So the responsibility falls squarely on the shoulders of our civil servants to ensure efficiency and effectiveness in utilizing our scarce resources.

WHAT IS eDATS?

Responsibilities of users.

• Mandatory one time registration using his/her CID number/Work Permit number/Special Resident Permit number.
• Should have valid e-mail ID.
• Process Travel Authorization based on travel order issued by the competent authority.
• Reduce Turnaround Time (TAT) in processing travel claims.
• Uniformity in application of rates and travel distance.
• Eliminate double claims/payment.
• Minimize risks of fraud, corruption and rent seeking opportunities.
• Real-time reports for monitoring and decision making.
• Support the overall Government initiative of digitalization.

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What is a business travel allowance?

Are business travel allowances a legal requirement, what does a business travel allowance usually cover.

• Transportation expenses for additional travel outside employees' regular commute. This can encompass airfares, taxi or local transportation costs, car hire, motorway tolls, parking fees, and standard mileage rates when staff use their personal vehicles.
• A meal allowance for food and drink consumed on the business trip. Usually, this will cover breakfast and dinner only when there has been an overnight travel.
• Accommodation provisions.
• Cover for incidental expenses such as tips and gratuities.
• Entertainment expenses for cases where travelers need to step outside their food and beverage stipend for business meals or drinks with clients.
• Travel insurance policies purchased for the business trip.
• Costs for medical considerations such as vaccinations for international travel.
• Provisions for dry cleaning or other laundry services when employees are required to stay away from their usual work location for extended periods.

What is a per diem allowance?

How can companies standardize their procedures for business travel allowances, how to improve travel policy compliance with travelperk, where can you define your business travel expense policy, what is a realistic business travel allowance.

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7th Pay Commission TA DA – Travelling and Daily Allowance – Recommendation and decision by Govt

7th Pay Commission TA DA – List of Allowances Covered while on Travel and cadre-wise eligibility – Committee’s recommendation and Government approval.

7th Pay Commission TA DA – Allowances allowed relating to Travel.

7th Pay Commission TA DA – Travelling and Daily Allowance are payable to Government Employees who are on official tour subject to certain conditions.

The analysis and recommendations of 7th Pay Commission as far as this reimbursement is concerned is as follows.

Daily Allowance

8.15.12 Daily allowance is meant to cover living expenses when employees travel out of their headquarters for work. Presently it is in the form of reimbursement of staying accommodation expenses, travelling charges (for travel within the city) and food bills, payable at the following rates:

For journeys on foot, undertaken in organizations like FSI, Survey of India, GSI, etc. for data collection purposes, an additional allowance of ₹7.5 per km travelled on foot shall be payable.

8.15.13 The existing dispensation is different for Railway employees who are paid a flat sum because they are currently not entitled to stay in any accommodation other than Railway rest houses. The lump-sum rates for Railway personnel are as follows:

8.15.14 Representations received regarding this allowance primarily deal with the reimbursement procedure, as it is claimed that getting hotel bills (in small towns) and food bills is not always practical.

Analysis and Recommendations

8.15.15 The Commission considered the present model of this allowance, followed both in Railways and in other ministries. It is proposed to adopt the best from both of them so that the administration of the allowance can be simplified. Accordingly the following is recommended :

a)  Reimbursement of staying accommodation charges ( ₹ per day)

For levels 8 and below, the amount of claim (up to the ceiling) may be paid without production of vouchers against self-certified claim only. The self-certified claim should clearly indicate the period of stay, name of dwelling, etc. The ceiling for reimbursement will further rise by 25 percent whenever DA increases by 50 percent. Additionally, it is also provided that for stay in Class ‘X’ cities, the ceiling for all employees up to Level 8 would be ₹1,000 per day, but it will only be in the form of reimbursement upon production of relevant vouchers.

b)  Reimbursement of travelling charges

Similar to Reimbursement of staying accommodation charges, for levels 8 and below, the claim (up to the ceiling) should be paid without production of vouchers against self- certified claim only. The self-certified claim should clearly indicate the period of travel, vehicle number, etc. The ceiling for levels 11 and below will further rise by 25 percent whenever DA increases by 50 percent. The rate of allowance for foot journeys shall be enhanced from the current rate of ₹7.5 per km to ₹12 per km travelled on foot. This rate also shall further rise by 25 percent whenever DA increases by 50 percent. c)  There will be no separate reimbursement of food bills. Instead, the lump sum amount payable will be as per Table 1 below and, depending on the length of absence from headquarters, would be regulated as per Table 2 below. Since the concept of reimbursement has been done away with, no vouchers will be required. This methodology is in line with that followed by Indian Railways at present (with suitable enhancement of rates). i.            Lump sum amount payable

( ₹ per day)

The Lump sum amount will increase by 25 percent whenever DA increases by 50 percent.

ii.            Timing restrictions

Absence from Head Quarter will be reckoned from midnight to midnight and will be calculated on a per day basis.

8.15.16 All the above provisions will apply to Railway personnel also .

Daily Allowance on Foreign Travel

8.15.17 This allowance is granted to employees when they undertake foreign travel. The rate of the allowance varies from $60 to $100 per day, depending upon the country involved. No demands have been received regarding this allowance.

8.15.18 Ministry of External Affairs and Ministry of Finance decide the rate of this allowance from time to time. Hence, the rates may be kept unchanged .

M ileage Allowance for Journeys by Road

8.15.35 It is more in the nature of entitlement for road journeys performed by different levels of employees. No demands have been received for any change.

8.15.36 The Commission is of the view that present provisions are adequate. Hence, status quo may be maintained except at places where no specific rates have been prescribed. There the rates should be enhanced by 50 percent. Accordingly, the following is recommended :

8.15.37 At places where no specific rates have been prescribed, the rate per km will go up by 25 percent each time DA rises by 50 percent.

Travelling Allowance

8.15.55 This allowance is in the nature of travel entitlements for different ranks of government employees. No demands have been received regarding this allowance.

8.15.56 The Commission opines that the present provisions are adequate. Hence, status quo is recommended with the present system of differentiation based on Grade Pay duly substituted by the Levels of the Pay Matrix:

8.15.57 It is suggested that Indian Railways reconsider its position regarding air travel to its employees, in light of the possible savings in terms of cost and man-hours, particularly after the pay revision as recommended by the Commission. The fact that additional seats will be released in trains for the public will be an added advantage. 7th Pay Commission TA DA – Travelling and Daily Allowance – Recommendation and decision by Govt

Here are the decisions of Govt with respect to Travelling Allowance and Daily Allowance which are effective from 1st July 2017

Daily Allowance:

• Level 6 to 8 of Pay Matrix to be entitled for Air Travel

2. Travelling Charges for Level -12 – 13 revised from ‘Non-AC Taxi charges up to 50 km to ‘AC taxi charges upto 50 Kms.’ and for level 14 and above to be revised from ‘AC Taxi charges up to 50 km’ to ‘AC taxi charges as per actual expenditure commensurate with official engagements’.Existing system of Daily allowance in the Ministry of Railways to continue.

Accepted as such.

Travelling Allowance:

Modifications accepted by the Government:

Level 6 to 8 of Pay Matrix to be entitled for Air travel. Level 5 A of Defence Forces to be clubbed with Level 6 for travelling entitlements. Existing system to continue in Ministry of Railways.

Mileage Allowance for journeys by road:

Click here to check the decision of Govt on all 197 Allowances applicable to Central Government Employees, Railway Employees and Defence Personnel

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• Expenses and employee benefits

Expenses and benefits: travel and subsistence

As an employer paying your employees’ travel costs, you have certain tax, National Insurance and reporting obligations.

This includes costs for:

• providing travel
• reimbursing travel
• accommodation (if your employee needs to stay away overnight)
• meals and other ‘subsistence’ while travelling

Subsistence includes meals and any other necessary costs of travelling, for example parking charges, tolls, congestion charges or business phone calls.

There are different rules for reporting expenses relating to public transport .

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Travel allowances

Explains the PAYG withholding implications on travel allowances.

Last updated 24 August 2021

Travel allowance is a payment made to an employee to cover accommodation, food, drink or incidental expenses they incur when they travel away from their home overnight in the course of their duties.

Allowances folded into your employee's salary or wages are taxed as salary and wages and tax has to be withheld, unless an exception applies.

You include the amount of the travel allowance in the allowance box on your employee's payment summary.

The exception applies if:

• you expect your employee to spend all of the travel allowance you pay them on accommodation, food, drink or incidental expenses
• you show the amount and nature of the travel allowance separately in your accounting records
• the travel allowance is not for overseas accommodation
• the amount of travel allowance you pay your employee is less than, or equal to the reasonable travel allowance rate.

If the exception applies, you:

• don't withhold tax from the travel allowance you pay your employee
• don't include the amount of the travel allowance in the allowance box on your employee's payment summary
• only include the allowance on their payslip.

If the first two exception conditions are met but you pay your employee a travel allowance over the reasonable travel allowance rate, you're required to withhold tax from the amount that exceeds the reasonable travel allowance rate. You also need to include the total amount of the travel allowance in the allowance box on your employee's payment summary.

You are always required to withhold tax from a travel allowance for overseas accommodation and include the amount of the travel allowance in the allowance box on your employee's payment summary.

Check the relevant Single Touch Payroll (STP) employer reporting guidelines to see how to report these payments through STP:

• STP Phase 1 employer reporting guidelines – allowances
• STP Phase 2 employer reporting guidelines – allowances

Reasonable travel allowance rate

Each year we publish the amounts we consider reasonable for claims for domestic and overseas travel allowance expenses.

• TD 2021/6 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2021–22 income year?
• TD 2020/5 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2020–21 income year?
• TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses
• Keeping travel expense records
• Tax return – allowances
• Tax return – work-related travel expenses

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• Per Diem Lookup

Travel resources

Per diem look-up, 1 choose a location.

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No results could be found for the location you've entered.

Rates for Alaska, Hawaii, U.S. Territories and Possessions are set by the Department of Defense .

Rates for foreign countries are set by the State Department .

2 Choose a date

Rates are available between 10/1/2021 and 09/30/2024.

The End Date of your trip can not occur before the Start Date.

Traveler reimbursement is based on the location of the work activities and not the accommodations, unless lodging is not available at the work activity, then the agency may authorize the rate where lodging is obtained.

Unless otherwise specified, the per diem locality is defined as "all locations within, or entirely surrounded by, the corporate limits of the key city, including independent entities located within those boundaries."

Per diem localities with county definitions shall include "all locations within, or entirely surrounded by, the corporate limits of the key city as well as the boundaries of the listed counties, including independent entities located within the boundaries of the key city and the listed counties (unless otherwise listed separately)."

When a military installation or Government - related facility(whether or not specifically named) is located partially within more than one city or county boundary, the applicable per diem rate for the entire installation or facility is the higher of the rates which apply to the cities and / or counties, even though part(s) of such activities may be located outside the defined per diem locality.

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International fares do not include taxes and fees, but include fuel surcharge fees.

Note for international fares: City codes, such as Washington (WAS), are used for international routes.

Federal travelers should use their authorized travel management system when booking airfare.

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Shop for lodging at competitive, often below-market hotel rates negotiated by the federal government.

FedRooms provides federal travelers on official business with FTR compliant hotel rooms for transient and extended stays (up to 29 days). The program uses FEMA and ADA-compliant rooms with flexible booking terms at or below per diem rates. Federal employees should make reservations, including FedRooms reservations, via their travel management service.

Visit GSALodging for more details on FedRooms and for additional programs offering meeting space, long term lodging, and emergency lodging.

Privately owned vehicle (POV) mileage reimbursement rates

GSA has adjusted all POV mileage reimbursement rates effective January 1, 2024.

* Airplane nautical miles (NMs) should be converted into statute miles (SMs) or regular miles when submitting a voucher using the formula (1 NM equals 1.15077945 SMs).

For calculating the mileage difference between airports, please visit the U.S. Department of Transportation's Inter-Airport Distance website.

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Home » Hot Topics » Germany per diem rates and how to manage employees travel expenses

Germany per diem rates and how to manage employees travel expenses

• 3 September 2022

One of the most frequently asked questions we get asked by our clients is how to manage employees travel expenses and Germany per diem rates. German regulations governing per diems, telecom expenses, hotel costs, meals reimbursements, mileage and so on, can often be confusing and different from an organization’s home-country rules.

Companies setting up shop in Germany are understandably concerned about how challenging it can be to stay compliant with German tax laws and want to avoid fines and reputational damage.

For this reason, we have decided to write this article with the aim of providing not only an overview on German travel expense reimbursements (as part of good expatriate management best practices ) but also to dissect and explain some of the finer details surrourding the complex circumstances companies face.

What are per diem rates?

According to Investopedia.com per diems (in German “ Tagespauschalen ”), from the Latin for “ by the day ”, refers to daily allowances paid to employees to cover costs incurred while on a business trip.

More specifically, the law in Germany talks about a lump sum for meals being paid to an individual as compensation for the expenses incurred in working outside their home and main workplace.

Moreover, an employment contract (or any other company issued policy) or collective bargaining agreement may also stipulate that per diems are to be used to reimburse employees.

Tax repercussions are likely (although as we will discuss in this article, not for all expenses categories) if employers choose to reimburse employees for actual expenses above the permitted per diem’s allowance instead.

On the other hand, there is less of an administrative burden for both companies and their employees when sticking with per diem rates as there is no need to:

– submit an itemized claim

– attach accompanying receipts

– update per diem rates each year in line the rising cost of living (the German Finance Ministry takes care of it)

What is not covered by Germany per diem rates

Now that we have a per diem definition and a law clarifying what per diem allowances are meant to cover in Germany, let us briefly look at what type of travel expenses, per diems are not meant to cover:

•           Air fares
•           Transport to and from the airport and/or meetings
•           Hotel costs for staying overnight
•           Breakfast, lunch and/or dinner whilst meeting clients

These types of expenses should be in fact be claimed as part of a separate expenses claim request  (a template is provided towards the bottom of this article)  for actual travel expenses incurred.

Per diem rates within Germany

When employees are traveling on business within Germany the costs of subsistence (drinks and meals) is typically reimbursed according to the applicable per diem rates which currently are:

–          between 8-24 hours, 14 EUR

–          for a full 24 hours day, 28 EUR

For the first and last day of travel, the applicable per diem rate is always 14 EUR.

Furthermore, there is also an overnight allowance of 20 EUR for accommodation.

In practice though, only self-employed individuals tend to claim this allowance via their German tax return as accommodation is usually fully paid by the employer for travelling employees.

Conditions for eligibility of per diem allowances

We have already discussed above what is not covered by per diem allowance.

Let us now look more specifically at what are some of the conditions to be fulfilled for employees to be eligible to claim the above mentioned per diem rates in full.

The main condition is that the full per diem meal allowances will only be paid if the employee actually covers the costs of their own food .

In the case of meals that the employee took and that are included for example in a hotel invoices (breakfast, lunch, dinner) or that the employer provided, there will be a compulsory reduction of the lump sum amount entitlement as follows:

– 20% reduction if breakfast is already included in hotel invoice

– 40% reduction if lunch / dinner are already provided by the employer.

It is also worth mentioning that meals provided by the employer for trips shorter than 8 hours are treated as fringe benefits and thus taxable on the employee are the following nominal values:

–          breakfast, 1.77 EUR

–          lunch or dinner, 3.30 EUR

Other conditions / rules attached to the eligibility for per diem rates in Germany include:

–          hours can be added together for multiple trips within the same day

–          The tax-free reimbursement can only be for 3 continuous months of business travel. These 3 months can then be reset after a 4 weeks break

–          All expense invoices should be addressed to the company’s corporate address and if they exceed 150 EUR, they should state the VAT amount

Per diems outside of Germany

Considering that the cost of living between countries (and sometimes even between cities within the same country) can vary significantly, the German Ministry of Finance each year publishes a table with the up to date international per diem rates.

However, due to the Covid pandemic, the international per diem and overnight allowances issued by virtue of the German Federal Travel Expenses Act, have not been updated on January 1, 2022.

As a result, the tax-free per diem lump sums published by the BMF letter dated 3 December 2020 , on “Tax treatment of travel expenses and travel expense allowances for business and professional trips abroad from January 1, 2021” – Federal Tax Gazette Part I (BStBl I) page 1256, are also valid for the calendar year 2022.

Overview of other travel expense reimbursements in Germany

Entertainment.

Entertainment expenses for events in which only employees working for the same company took part are not accepted as an external party also needs to be involved.

Additionally, invoices for entertainment expenses reimbursements should clearly show the following information:

• Employee/s name/s
• Name/s of the people entertained
• The reason for the entertainment provided
• The place, date and signature

0.30 EUR/Km can be reimbursed tax-free. The lump sum rate covers all expenses related to the car such as insurance, depreciation, petrol / diesel, maintenance, car wash, etc.

Tax-free reimbursements for expenses incurred during business use for private cars can only be paid if the employees states on their expenses claims the driven KMs and other relevant details about the trip such as start / end KMs balance, details of the route taken and the reason for the trip.

Anything paid in addition to the 0.30 EUR/KM rate, will be deemed taxable.

This means that the amount will have to be split up in a tax-free part and a taxable part (taxed at individual income progressive tax rates).

Telecom expenses / home office

If the home telephone / mobile phone / internet contracts are between the telecommunication company and the employee and not between the telecommunication company and the employer, there are 4 possibilities to reimburse these expenses:

1) The employer can pay a monthly lump sum of 20% of the invoice amount up to a max. of 20 EUR tax free to the employee. Any additional reimbursements would be taxable.

2) If the employee highlights the costs incurred for the employer on the telecommunication company’s itemized bill every month, the employer can reimburse those costs tax-free.

3) If the employee highlights the costs incurred for the employer on the telecommunication company’s itemized bill for a period of 3 months, a typical percentage of total expenses concerning the employer can be calculated on the overall total bill, which can then be compensated tax free going forward every month. Any additional reimbursements above the calculated percentage apportionment would be taxable.

4) The employees could prove they have two different mobile phones / landline numbers so that they could clearly be differentiated between the one used for business purposes and the one used for private purposes. In such a scenario, all the expenses incurred for business purposes on the dedicated line / number can be reimbursed tax-free.

Hotel costs

Hotel stays during a business trip can be fully reimbursed tax free provided the invoice is addressed to the employer and not to the employee.

Other expenses

Other expenses such as flight, train or bus tickets can all be reimbursed in full tax-free.

Similarly, the following ancillary expenses can also be reimbursed tax-free for the full actual amount incurred:

–          Storage of luggage (including luggage insurance)

–          Letters to the employer or to business partners / clients

–          Parking fees / tolls

–          Rental car at the place of the destination

–          Damages to the employee’s belongings if they are typical for business traveling

To help employees with their expenses claims, our travel expenses form may be downloaded here and used when submitting reimbursements requests (if the employer is not already providing one).

FAQ on Germany per diem rates and travel expenses reimbursements

Assuming the company chooses to reimburse the employee for the actual expenses amount incurred which happens to be above an allowable tax-free rate / per diem, does the employer have any compliance requirements in terms of reporting the difference .

(i.e. employer taxes and/or any requirements to report on the employee’s behalf with potential penalties if they don’t)?

Yes, the exceeding part is considered salary and as such subject to taxes and social security contributions. 

As in the case of salary, the employer taxes the employee at source and has to fulfill his tax and social security obligations at all times.

The employee is the debtor of the income tax but the employer deducts it from him / her.

The employer is therefore responsible for withholding the applicable income taxes and social security contributions from the employee’s pay and thus liable, in case they do not.

Failure to do so could be deemed a criminal offence pursuant to Sec. 266a StGB (Criminal Law Act) .

Contact us should you require further clarifications on per diem rates and travel expenses reimbursements in Germany and/or have a look at some of the other insights  we have published.

You might also be interested in:

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Topic no. 511, Business travel expenses

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Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes.

You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you can't deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you'll work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but aren't limited to, the costs of:

• Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)
• The airport or train station and your hotel,
• The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
• Shipping of baggage, and sample or display material between your regular and temporary work locations.
• Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
• Lodging and non-entertainment-related meals.
• Dry cleaning and laundry.
• Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
• Tips you pay for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you're self-employed, you can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) , or if you're a farmer, on Schedule F (Form 1040), Profit or Loss From Farming .

If you're a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income. This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106, Employee Business Expenses and report them on Form 1040 , Form 1040-SR , or Form 1040-NR as an adjustment to income.

Good records are essential. Refer to Topic no. 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses .

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Daily Allowance Travel For Govt Employee| Daily Allowance Policy| Daily Allowance Rates | Daily Allowance Calculation | Daily Allowance taxable or not Under 7 th Pay Commission

As per the government norms, a daily allowance is a uniform allowance that shall be granted per day of absence from the headquarters. This shall only be provided to the government employees who are absent from the headquarters for a specific period of time.

Also, the traveling has to be beyond 25 kilometers (from the headquarters) to avail this benefit.

Daily Allowance Eligibility

Since daily allowance is the cost that would reimburse the employee if he has gone to stay outside, the only eligibility that you need is to be a government employee who is working away from his hometown.

To avail the DA, you must provide a self certified claim. Your claim should indicate your period of stay.

Daily Allowance Rates

The rates of the daily allowance vary widely as per the Grade Pay. These usually increase with the class of cities that the person lives in, with the Class A cities having the highest Daily Allowances since the traveling costs in these places are higher.

Daily Allowance Travel

At present the traveling charges are being calculated as per the journeys on foot, taxis, food bills and accommodation/ guest houses.

Daily Allowance Calculation

If you are on tour or travel, then the daily allowance will be calculated per the number of days of absence from the office – from midnight to midnight.

If you are absent for more than 6 hours but less than 12 hours from your office then you are eligible for 70% daily allowance.

In case of an absence of 12 or more hours from the office, you are liable to get full daily allowance.

If you are free boarding and lodging you will get 25% of the DA. If you are lodging alone then you will get 50% of the DA. If you are accommodated in the office building you will get 75% DA.

There’s also a mileage allowance, which is given to meet the cost of traveling during office hours for a job that requires one to travel. If a government employee takes a route which isn’t the shortest, but is actually cheaper than the shortest, then the amount spent on journeying this route will the amount of DA that will be provided.

Daily Allowance taxable or not

According to a section 10 (14) under the government norms, Daily allowance is fully exempted from tax. This means that the amount that you receive as the daily allowance shall not be liable to go through tax.

So here are the things that we learnt about Daily Allowance:

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ATO Reasonable Travel Allowances

‘Reasonable’ allowances received in accordance with ATO’s reasonable travel allowances schedules are not required to be declared as income, and can be excluded from the expense substantiation requirements.

Per diem rate schedules of amounts considered reasonable are set out in Tax Determinations published by the Tax Office annually.

Tax Ruling TR 2004/6 describes the substantiation exception for expenses which are in line with the prescribed reasonable allowance amounts.

2021, 2022, 2023 and 2024 rates and for prior years are set out below.

The annual determinations set out updated ATO reasonable allowances for each financial year for:

• overtime meal expenses – for food and drink when working overtime
• domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work
• overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

On this page:

2017- 18-Addendum

More information

Substantiation rules

Substantiation in practice

Alternative: Business travel expense claims

Distinguishing Travelling, Living Away and Accounting for Fringe Benefits

See also: Super for long-distance drivers – ATO

Allowances for 2023-24

The full document in PDF format: 2023-24 Determination TD TD 2023/3 (pdf).

The 2023-24 reasonable amount for overtime meal expenses is $35.65.

Reasonable amounts given for meals for employee truck drivers (domestic travel) are as follows:

• breakfast $28.75
• lunch $32.80
• dinner $56.60

For full details including domestic and overseas allowances in accordance with salary levels, refer to the full determination document:

2023-24 Domestic Travel

Table 1：Salary $138,790 or less

Table 2: Salary $138,791 to $247,020

Table 3: Salary $247,021 or more

Table 4: High cost country centres accommodation expenses

Table 5: Tier 2 country centres

Table 5a: Employee truck driver’s meals (food and drink)

2023-24 Overseas Travel

Table 6: Salary $138,790 or less

Table 7: Salary $138,791 to $247,020

Table 8: Salary $247,021 or more

Table 9: Table of countries

Table 1：Reasonable amounts for domestic travel expenses – employee’s annual salary $138,790 or less

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $138,791 to $247,020

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $247,021 or more

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,790 or less

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,791 to $247,020

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $247,021 or more

Allowances for 2022-23

The full document in PDF format: 2022-23 Determination TD 2022/10 (pdf).

The 2022-23 reasonable amount for overtime meal expenses is $33.25.

Reasonable amounts given for meals for employee truck drivers are as follows:

• breakfast $26.80
• lunch $30.60
• dinner $52.75

2022-23 Domestic Travel

Table 1: Salary $133,450 and below

Table 2: Salary $133,451 to $237,520

Table 3: Salary $237,521 and above

2022-23 Overseas Travel

Table 6: Salary $133,450 and below

Table 7: Salary – $133,451 to $237,520

Table 8: Salary – $237,521 and above

Table 1: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,450 and below

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,451 to $237,520

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $237,521 and above

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,450 and below

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,451 to $237,520

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $237,521 and above

Allowances for 2021-22

The full document in PDF format: 2021-22 Determination TD 2021/6 (pdf).

The document displayed with links to each sections is set out below.

For the 2021-22 income year the reasonable amount for overtime meal expenses is $32.50

2021-22 Domestic Travel

Table 1: Salary $129,250 and below

Table 2: Salary $129,251 to $230,050

Table 3: Salary $230,051 and above

2021-22 Overseas Travel

Table 6: Salary $129,250 and below

Table 7: Salary – $129,251 to $230,050

Table 8: Salary – $230,051 and above

2021-22 Domestic Table 1: Employee’s annual salary – $129,250 and below

2021-22 Domestic Table 2: Employee’s annual salary – $129,251 to $230,050

2021-22 Domestic Table 3: Employee’s annual salary – $230,051 and above

2021-22 Domestic Table 4: High cost country centres – accommodation expenses

2021-22 Domestic Table 5: Tier 2 country centres

2021-22 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2021-22 Overseas Table 6: Employee’s annual salary – $129,250 and below

2021-22 Overseas Table 7: Employee’s annual salary – $129,251 to $230,050

2021-22 Overseas Table 8: Employee’s annual salary – $230,051 and above

2021-22 Overseas Table 9: Table of countries

Allowances for 2020-21

Download full document in PDF format: 2020-21 Determination TD 2020/5 (pdf).

The document displayed with links to each section is set out below.

For the 2020-21 income year the reasonable amount for overtime meal expenses is $31.95 .

2020-21 Domestic Travel

Table 1: Salary $126,970 and below

Table 2: Salary $126,971 to $225,980

Table 3: Salary $225,981 and above

2020-21 Overseas Travel

Table 6: Salary $126,970 and below

Table 7: Salary – $126,971 to $225,980

Table 8: Salary – $225,981 and above

2020-21 Domestic Travel 2020-21 Domestic Table 1: Employee’s annual salary – $126,970 and below

2020-21 Domestic Table 2: Employee’s annual salary – $126,971 to $225,980

2020-21 Domestic Table 3: Employee’s annual salary – $225,981 and above

2020-21 Domestic Table 4: High cost country centres – accommodation expenses

2020-21 Domestic Table 5: Tier 2 country centres

2020-21 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2020-21 Overseas Travel 2020-21 Overseas Table 6: Employee’s annual salary – $126,970 and below

2020-21 Overseas Table 7: Employee’s annual salary – $126,971 to $225,980

2020-21 Overseas Table 8: Employee’s annual salary – $225,981 and above

2020-21 Overseas Table 9: Table of countries

Allowances for 2019-20

The determination in sections:

Domestic Travel

Table 1: Employee’s annual salary – $124,480 and below

Table 2: Employee’s annual salary – $124,481 to $221,550

Table 3: Employee’s annual salary – $221,551 and above

Table 4: High cost country centres – accommodation expenses

Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel

Table 6: Employee’s annual salary – $124,480 and below

Table 7: Employee’s annual salary – $124,481 to $221,550

Table 8: Employee’s annual salary – $221,551 and above

For the 2019-20 income year the reasonable amount for overtime meal expenses is $31.25.

The reasonable travel and overtime meal allowance expense amounts commencing 1 July 2019 for the 2019-20 income year are contained in Tax Determination TD 2019/11 (issued 3 July 2019).

Download the PDF or view online here .

Domestic Travel Table 1: Employee’s annual salary – $124,480 and below

Domestic Travel Table 2: Employee’s annual salary – $124,481 to $221,550

Domestic Travel Table 3: Employee’s annual salary – $221,551 and above

Domestic Travel Table 4: High cost country centres – accommodation expenses

Domestic Travel Table 5: Tier 2 country centres

Domestic Travel Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel Table 6: Employee’s annual salary – $124,480 and below

Overseas Travel Table 7: Employee’s annual salary – $124,481 to $221,550

Overseas Travel Table 8: Employee’s annual salary – $221,551 and above

Overseas Travel Table 9: Table of countries

Substantiation and Compliance

Taxation Ruling TR 2004/6 explains the the way in which the expenses can be claimed within the substantiation rules, including the requirement to obtain written evidence and exemptions to that requirement.

Allowances which are ‘reasonable’ , i.e. comply with the Reasonable Allowance determination amounts and with TR 2004/6 are not required to be declared as income and are excluded from the expense substantiation requirements.

These substantiation rules only apply to employees. Non-employees must fully substantiate their travel expense claims. Expenses for non-working accompanying spouses are excluded.

Key points :

To be claimable as a tax deduction, and to be excluded from the expense substantiation requirements, travel and overtime meal allowances must:

• be for work-related purposes; and
• be supported by payments connected to the relevant expense
• for travel allowance expenses, the employee must sleep away from home
• if the amount claimed is more than the ‘reasonable’ amount set out in the Tax Determination, then the whole claim must be substantiated
• employees can be required to verify the facts relied upon to claim a tax deduction and/or the exclusion from the substantiation requirements
• an allowance conforming to the guidelines doesn’t need to be declared as income or claimed in the employee’s tax return, unless it has been itemised on the statement of earnings. Amounts of genuine reasonable allowances provided to employees(excludng overseas accommodation) are not required to be subjected to tax withholdings or itemised on an employee’s statement of earnings.
• claims which don’t match the amount of the allowance need to be declared.

The Tax Office has issued guidance on their position.

[11 August 2021] Taxation Ruling TR 2021/4 reviews the tax treatment of accommodation and food and drink expenses, and provides 14 examples which distinguish non-deductible living expenses from deductible travelling on work expenses. FBT implications for the ‘otherwise deductible’ rule and travel and LAFHA allowances are also considered.

[11 August 2021] Practical Compliance Guideline PCG 2021/3 (which finalises draft PCG 2021/D1 ) provides the ATO’s compliance approach to determining if allowances or benefits provided to an employee are travelling on work, or living at a location.

For FBT purposes an employee is deemed to be travelling on work if they are away for no more than 21 consecutive days, and fewer than 90 days in the same work location in a FBT year.

See also: Travel between home and work and LAFHA Living Away From Home

The issue of annual determination TD 2017/19 for the 2017-18 year marked a tightening of the Tax Office’s interpretation of the necessary conditions for the relief of allowances from the substantiation rules, which would otherwise require full documentary evidence (e.g. receipts) and travel records. (900-50(1))

For a full discussion of the issues, this article from Bantacs is recommended: Reasonable Allowance Concessions Effectively Abolished By The ATO .

Prior to 2017-18

In summary: Prior to 2017-18 the Tax Office rulings stated the general position that provided a travel allowance was ‘reasonable’ (i.e. followed the ATO-determined amounts) then substantiation with written evidence was not required. “In appropriate cases”, however employees may have been required to show how their claim was calculated and that the expense was actually incurred.

What changed

The relevant wording was changed in the 2017-18 determination to now require that more specific additional evidence be available if requested. This additional evidence is not prescribed in the tax rules, but represents a higher administrative standard being applied by the Tax Office.

The required evidence includes being able to show:

• you spent the money on work duties (e.g. away from home overnight for work)
• how the claim was worked out (e.g. diary record)
• you spent the money yourself (e.g. credit card statement, banking records)
• you were not reimbursed (e.g. letter from employer)

Other requirements highlighted by the Bantacs article include:

• a representative sample of receipts may be required to show that a reasonable allowance (or part of it) has actually been spent (TD 2017/19 para 20)
• hostels or caravan parks are not considered eligible for the accommodation component of a reasonable allowance because they are not the right kind of “commercial establishment”, examples of which are hotels, motels and serviced apartments (para 14)
• reasonable amounts for meals can only be for meals within the specific hours of travel (not days), and can only be for breakfast, lunch or dinner (para 15), and therefore could exclude, for example, meals taken during a period of night work.

Tip : The reasonable amount for incidentals still applies in full to each day of travel covered by the allowance, without the need to apportion for any part day travel on the first and last day. (para 16).

Alternative: business travel expense claims

With the burden of proof on ‘reasonable allowance’ claims potentially quite high, an alternative is to opt for a travel expense claim made out under the general substantiation rules for employees, or under the general rules for deductibility for businesses.

The kind of business travel expenses referred to here could include:

Airfares Accommodation Meals Car hire Incidentals (e.g. taxi fares)

The Tax Office has an article describing how to meet the requirements for claiming travel expenses as a tax deduction. See: Claiming a tax deduction for business travel expenses

Travel diary

A travel diary is required by sole traders and partners for overnight expenses and recommended for everyone else (including companies and trusts).

It is important to exclude any private portion of travelling expense which is non-deductible, or if paid on behalf of an employee gives rise to an FBT liability.

For example the expenses of a non-business associate (e.g. spouse), the cost of private activities such as sight-seeing, and accommodation and associated expenses for the non-business portion of a trip.

Airfares to and from a business travel destination would not need to be apportioned if the private element of the trip such as sightseeing was only incidental to the main purpose and time spent.

This is an example of a travel diary for Rebecca who owns a business as a sole trader landscape gardener. (courtesy of ATO Tax Time Fact Sheet )

Allowances for 2018-19

For the 2018-19 income year the reasonable amount for overtime meal allowance expenses is $30.60 .

The meal-by-meal amounts for employee long distance truck drivers are $24.70, $28.15 and $48.60 per day for breakfast, lunch and dinner respectively.

This determination includes ATO reasonable allowances for

(a) overtime meal expenses – for food and drink when working overtime (b) domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work (particular reasonable amounts are given for employee truck drivers, office holders covered by the Remuneration Tribunal and Federal Members of Parliament) (c) overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

Allowances for 2017-18

An addendum was issued modifying paragraphs 23 to 30 of determination TD 2017/19 setting out the new reasonable amounts, and consolidated into TD 2017/19 as linked above. For reference purposes, the first-released version of TD 2017/19 issued 3 July 2017 is linked here .

2017-18 Addendum: ATO reinstates the meal-by-meal approach for truck drivers’ travel expense claims

On 27 October 2017 the ATO announced the reinstatement of the meal-by-meal approach for truck drivers who claim domestic travel expenses for meals. The following new reasonable amounts have now been included in an updated version of the current ruling (see on page 7)：

For the 2017-18 income year the reasonable amount for overtime meal allowance expenses is $30.05 .

This determination contains ATO reasonable allowances for:

• overtime meals
• domestic travel
• employee truck drivers
• overseas travel
• $24.25 for breakfast
• $27.65 for lunch
• $47.70 for dinner

The amount for each meal is separate and can’t be combined into a single daily amount or moved from one meal to another.

See: ATO media release

Allowances for 2016-17

For the 2016-17 income year the reasonable amount for overtime meal allowance expenses is $29.40 .

Allowances for 2015-16

Download the PDF or view online here . For the 2015-16 income year the reasonable amount for overtime meal allowance expenses is $ 28.80 .

Allowances for 2014-15

Allowances for 2013-14

The reasonable travel and overtime meal allowance expense amounts for the 2013-14 income year are contained in Tax Determination TD 2013/16 . For the 2013-14 income year the reasonable amount for overtime meal allowance expenses is $ 27.70 .

Allowances for 2012-13

The reasonable travel and overtime meal allowance expense amounts for the 2012-13 income year are contained in Tax Determination TD 2012/17 . For the 2012-13 income year the reasonable amount for overtime meal allowance expenses is $27.10

Allowances for 2011-12

The reasonable travel and overtime meal allowance expense amounts for the 2011-12 income year are contained in Tax Determination TD 2011/017 . For the 2011-12 income year the reasonable amount for overtime meal allowance expenses is $26.45

This page was last modified 2023-06-28

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Daily Subsistence Allowance (DSA)

Staff to whom daily subsistence allowance is payable shall normally be paid such allowance in accordance with a schedule of standard rates established periodically by the International Civil Service Commission (ICSC) and in line with the provisions of the present administrative instruction.

The daily subsistence allowance shall comprise the total contribution of the United Nations towards such charges as meals, lodging, gratuities and other such payments made for services rendered during official travel.

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