Per Diem
Per diem, from the Latin for "by the day," refers to a specific amount of money that an organization gives to an individual, typically an employee, per day to cover living expenses when traveling on the employers business. This daily allowance can cover part or all of the expenses incurred, including lodging, meals, and incidental expenses. The U.S. General Services Administration (GSA) establishes the per diem reimbursement rates that federal agencies use to reimburse their employees for subsistence expenses incurred while on official travel within the continental U.S. . Per diem rates are set by fiscal year and vary depending on the location, with different rates for different areas.
Per diem payments are beneficial for both employers and employees, as they reduce recordkeeping and paperwork, minimize the need for reimbursement claims, and can help employees avoid unnecessary taxation if set at or below the federal rate. Additionally, per diem can also refer to a compensation system in which an employee is paid per day worked, as opposed to receiving a salary that pays bi-monthly.
In summary, per diem is a daily allowance provided to cover living expenses while on business travel, and it can include lodging, meals, and incidental expenses. The rates are set by the GSA and vary depending on the location and fiscal year.
