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Per Diem Tutorial for the New Government Contractor

government-per-diem-travel-expense-rules.jpgYou're finally at the point where your employees get to travel. But getting reimbursed for travel and expenses seems to have an awful lot of rules. Learn everything you need to know about what's allowed and how much you're entitled to per GSA Per Diem reimbursements.

Who Determines Travel Regulations?

The Federal Travel Regulation (FTR) governs travel policies for Federal civilian employees and other employees who are eligible to travel at government expense.  The General Services Administration (GSA), the Department of Defense (DOD) and the State Department work together to implement policies and set rates that are fair and reasonable for travel expenses. The GSA sets the rates for the Continental United States (CONUS); the DOD sets the rates for Alaska, Hawaii, Puerto Rico and Guam; and the State Department establishes rates for foreign destinations. 

What Is Per Diem?

Per diem is the term used for the amount of money that is reimbursable for travel expenses per day of travel. Per diem includes rates for lodging, meals and incidental expenses. Meals and incidental expenses are usually referred to as M&IE and include three meals per day, tips for those meals and fees and tips for personal service employees, porters and baggage handlers. Travel to conferences, training, continuing education and other work-related travel away from an employee’s official work station for 12 hours or longer is often eligible for per diem.

How Is Per Diem Lodging Determined?

Per diem in the CONUS is based on average daily rate data provided by contractors in local lodging properties for each destination area. Areas are generally defined by county, although some areas fall under the category of non-standard areas (NSA). If your destination falls in an NSA, the maximum per diem rates fall under the CONUS standard rates of $91 for lodging and $51 for M&IE for the current fiscal year. Although the online per diem tools don’t require you to enter the destination county, you’ll want to know the county in which the traveler will be staying for reporting accuracy. You can find the county at the NACo County Explorer website

How Much Is Allowed for M&IE?

Meals and incidentals are grouped into six tiers in the CONUS. They range from $51 to $74 and a specific amount is given for each meal with the remaining $5 set aside for incidentals. These amounts are only allowed if the traveler has to purchase their own meal. If a meal is included at the event they are attending or if the lodging provides a meal, the rate for that meal must be subtracted from the total M&IE for that day. Here’s an example:

The standard M&IE rate is $51. It’s broken down into $11 for breakfast, $12 for lunch, $23 for dinner and $5 for incidentals. If a traveler stays at a hotel that provides a continental breakfast and lunch is provided at the conference, the total M&IE for the day would be $28 rather than $51.

The 75 Factor

You aren't always allowed the maximum per diem. Three basic rules when determining per diem are easy if you can remember the 75 factor. 

  1. The first and last day of travel are calculated at 75 percent, not the maximum.
  2. Any receipts totaling $75 and over need to be kept and turned in upon return.
  3. One-day travel away from your official work station of 12 hours or more is eligible for 75 percent of meals and incidentals.

Finding Per Diem Rates

The GSA website offers two options for looking up per diem rates. For general rates, you can go to the “old” tool, enter the city and state and you’ll see lodging and M&IE rates for that county by month for the current fiscal year. If you only choose a state without entering a city or zip code, the generated results will show all rates for the state. Using this calculator, you must do further calculations beyond the general data, but it can come in handy if you need to compare reimbursable rates for several destinations in the same state.

For a more comprehensive determination of allowable per diem rates, the “new” tool is helpful. First choose the location by state, state and city or zip code. Then, you have the option to enter the travel dates. The results show you an estimated per diem total for the entire trip and give you a breakdown by day of maximum allowable per diem. If you click the Meals & IE tab, you can also see a breakdown of M&IE by meal. This is extremely helpful for determining what amounts to deduct if some meals are already included in the stay. Here’s an example of a six-day stay in Las Vegas, Nevada using both the old and new tools. The old tool shows that maximum lodging is $102 and M&IE is $64.

The new tool gives a breakdown of the rates:

  • $102 for lodging for all days except the last
  • $48 for M&IE for the first and last days (calculated at the required 75 percent)
  • $64 for M&IE for each remaining day
  • Further breakdown of M&IE by meal at $15 for breakfast, $16 for lunch, $28 for dinner and $5 for IE
  • An estimated total of $862

The new tool also includes tabs with further assistance for finding reasonable airfares, hotels within the per diem range and rates for privately owned vehicle (POV) mileage.

Finding the best deals and getting reimbursed for travel doesn't have to be difficult. GSA has multiple resources for planning travel and getting the most for your travel dollars. So, go ahead and plan that business trip knowing you'll be able to recoup some expenses.

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