Per diem pay refers to a daily allowance paid to employees to cover costs incurred while on a business trip. The allowance typically covers expenses such as lodging, meals, and incidental expenses such as fees and tips for services. 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. 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. (CONUS), which includes the 48 contiguous states and the District of Columbia. The per diem program has several standards that it follows in its systematic structured per diem methodology. The key takeaways of per diem pay are:
- Per diems are daily allowances paid to employees to cover costs they incur while on a business trip.
- Per diems cover business expenses for accommodations, meals, and incidentals.
- Per diem also refers to a per day compensation received by some workers.
- Rather than full-time jobs, these types of workers are usually on temporary or short-term contracts.
- A business that implements a fixed per diem method for business expenses usually pays the employee a fixed amount per day.
In summary, per diem pay is a daily allowance given to employees to cover expenses incurred while on a business trip.
