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Employee-friendly expense reporting

Everything you need to know about a per diem expense report

September 12, 2019
|
5
Min Read
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Does your business offer it's traveling employees per diems? In that case, you're most likely looking for an effective way to manage and record your employee per diem expenses. An ideal way to do so is by using a per diem expense report. 

In this article, we discuss the nuances of a per diem expense report and why it matters for your business.

What is Per Diem?

Some companies prefer providing corporate credit cards to manage business expenses. Others prefer reimbursing out-of-pocket expenses post-trip. However, there is another way wherein you give a daily fixed allowance to help employees with business travel expenses. These allowances are known as Per Diems.

Derived from the Latin phrase which means, ‘for each day,’ Per Diem is a daily allowance given to traveling employees to cover their business trip expenses. According to the IRS, Per Diem expenses include lodging, meals, and incidental expenses.

Types of business expenses in a per diem expense report:

  • Meal expenses - This includes breakfast, lunch, and dinner. Per diem rates for meals change based on the location and are broken down into six-tiers
  • Incidental expenses - Incidental expenses include costs that aren’t fixed per se, like room service, dry cleaning, tips to waiters, luggage carriers, etc.
  • Lodging expenses - Lodging expenses include overnight stays in hotels, resorts, serviced apartments, inns, etc. Just like meals and incidental expenses, per diems for lodging also vary by location.

Should your business provide per diems for employees? 

Per diems are handled differently by different companies. They may either take care of all the business expenses or can be used partially. Some companies provide per diems on meals and incidental expenses; others provide per diems only for lodging. 

For instance, a company can offer a per diem of $156 for accommodation while meals and incidental expenses are taken care of by the employee and reimbursed later.

SUGGESTED READS: 

How to effectively track Per Diems in an expense report form?

How to track expenses on an expense report form?

How can businesses track mileage using an expense report form?

How can businesses set a per diem rate? 

To set up a per diem policy for business expenses, companies refer to the per diem rates given by the Federal government. The government sets the standard rates for business travel (both domestic and international) every year. These rates are devised based on the cost of living in a particular city. Companies can then refer and set up a per diem rate more or less than the federal standards. 

In case you do not find the per diem rate for a city, you can opt for the standard per diem rate. The per diem rate for 2019 is $149, from which $94 goes for lodging and $55 for meals and incidental expenses. To access the federal per diem rates, visit the General Service Administration (GSA) page and enter the city or zip code of the city your employees would visit.

SUGGESTED READS: 

Per Diem Rates for Business Travel Expenses

When do employees need to submit a per diem expense report?

Traveling employees have to submit a per diem expense report within 60 days of a business trip. Even though they do not need to provide receipts for every spend, they would still need to document they're per diem allowances. 

What are the must-have categories in a per diem expense report:

- Date of the expense

 - Location of the business trip

- Business purpose

- Receipts of out-of-pocket expenses

With these factors kept in mind, you can ensure that your bottom line is in check. 

Do keep in mind that per diem does not include transportation costs. Companies can either arrange transportation for their employees or employees can spend out of their own pockets and seek reimbursement. If employees are using personal cars during a business trip, companies can reimburse them using IRS mileage reimbursement rates.

Employee-friendly expense reporting

Everything you need to know about a per diem expense report

September 12, 2019
|
5
Min Read

Does your business offer it's traveling employees per diems? In that case, you're most likely looking for an effective way to manage and record your employee per diem expenses. An ideal way to do so is by using a per diem expense report. 

In this article, we discuss the nuances of a per diem expense report and why it matters for your business.

What is Per Diem?

Some companies prefer providing corporate credit cards to manage business expenses. Others prefer reimbursing out-of-pocket expenses post-trip. However, there is another way wherein you give a daily fixed allowance to help employees with business travel expenses. These allowances are known as Per Diems.

Derived from the Latin phrase which means, ‘for each day,’ Per Diem is a daily allowance given to traveling employees to cover their business trip expenses. According to the IRS, Per Diem expenses include lodging, meals, and incidental expenses.

Types of business expenses in a per diem expense report:

  • Meal expenses - This includes breakfast, lunch, and dinner. Per diem rates for meals change based on the location and are broken down into six-tiers
  • Incidental expenses - Incidental expenses include costs that aren’t fixed per se, like room service, dry cleaning, tips to waiters, luggage carriers, etc.
  • Lodging expenses - Lodging expenses include overnight stays in hotels, resorts, serviced apartments, inns, etc. Just like meals and incidental expenses, per diems for lodging also vary by location.

Should your business provide per diems for employees? 

Per diems are handled differently by different companies. They may either take care of all the business expenses or can be used partially. Some companies provide per diems on meals and incidental expenses; others provide per diems only for lodging. 

For instance, a company can offer a per diem of $156 for accommodation while meals and incidental expenses are taken care of by the employee and reimbursed later.

SUGGESTED READS: 

How to effectively track Per Diems in an expense report form?

How to track expenses on an expense report form?

How can businesses track mileage using an expense report form?

How can businesses set a per diem rate? 

To set up a per diem policy for business expenses, companies refer to the per diem rates given by the Federal government. The government sets the standard rates for business travel (both domestic and international) every year. These rates are devised based on the cost of living in a particular city. Companies can then refer and set up a per diem rate more or less than the federal standards. 

In case you do not find the per diem rate for a city, you can opt for the standard per diem rate. The per diem rate for 2019 is $149, from which $94 goes for lodging and $55 for meals and incidental expenses. To access the federal per diem rates, visit the General Service Administration (GSA) page and enter the city or zip code of the city your employees would visit.

SUGGESTED READS: 

Per Diem Rates for Business Travel Expenses

When do employees need to submit a per diem expense report?

Traveling employees have to submit a per diem expense report within 60 days of a business trip. Even though they do not need to provide receipts for every spend, they would still need to document they're per diem allowances. 

What are the must-have categories in a per diem expense report:

- Date of the expense

 - Location of the business trip

- Business purpose

- Receipts of out-of-pocket expenses

With these factors kept in mind, you can ensure that your bottom line is in check. 

Do keep in mind that per diem does not include transportation costs. Companies can either arrange transportation for their employees or employees can spend out of their own pockets and seek reimbursement. If employees are using personal cars during a business trip, companies can reimburse them using IRS mileage reimbursement rates.

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