The General Services Administration (GSA) has issued its annual updated list of federal maximum per diem rates for travel to locations within the continental United States. Per Diem Bulletin 16-1 is effective for travel taken on or after October 1, 2015. The per diem rate is a combination of the lodging expense rate and the meal and incidental expense rate for travel.
For travel within the United States, the per diem rate can be used to substantiate certain travel expenses. Employers may simply reimburse using the per diem allowance for each day of travel instead of asking employees to substantiate business expenses. The amount of the per diem allowance is substantiated as long as the amount does not exceed the per diem rate. The employee also has to validate the time, place, and business purpose for the expense. Any per diem amounts exceeding the federal rates are taxable wages subject to employment taxes.
The bulletin also provides some new information for 2015. The GSA accepted the recommendation of a government-wide travel advisory committee. It also decided that the standard lodging rate should now be reviewed annually instead of every three years, beginning in fiscal year 2016. The standard lodging rate for fiscal year 2016 will now increase from $83 to $89 per day.
In addition, the meal and incidental rates have also been adjusted for the first time since 2010. The standard meal and incidental rate is now based on the Consumer Price Index: food away from home measure. It will be $51 for fiscal year 2016. For all locations within the continental United States not shown on the list, the lodging rate is $89 per day and the meal and incidental rate will be $51. This gives a combined maximum standard per diem rate of $140 per day.
Read the September issue of Payroll Currently for more information, including per diem rates for non-standard areas.