Federal contractors, grantees, and any business billing travel to a government entity live under a stricter reimbursement regime than the commercial world. The rules come from the Federal Travel Regulation (FTR) and GSA per-locality per diem rates, and getting them wrong can turn a reimbursable expense into a disallowed cost on audit. This guide covers the 2026 (FY2026) framework for anyone reimbursing or claiming government travel.
The FY2026 Rate Baseline
| Item | Standard CONUS rate |
|---|---|
| Lodging | $110/day |
| M&IE (meals + incidentals) | $68/day (5 tiers: $68–$92) |
| Total standard | $178/day |
About 298 non-standard areas (NSAs) — San Francisco, New York City, Washington DC, Nantucket, and similar high-cost localities — carry higher caps, some with monthly lodging swings (Nantucket ranges $175–$471/night). Always look up the destination's city page; do not bill at the standard rate for an NSA.
The 75% Rule (First and Last Day)
On the first and last travel day, M&IE is paid at 75% of the applicable rate — $51 at the standard tier, $69 at the $92 tier. Lodging is unaffected (reimbursed for nights actually stayed). This is the single most-misapplied rule in government travel math; the per diem calculator applies it automatically.
Accountable Plan: The Non-Negotiable
To keep per diem clean (and, for commercial travel, tax-free), the arrangement must be an accountable plan (Treas. Reg. §1.62-2): the traveler substantiates the amount, time, place, and business purpose, and returns any excess advance. For government travel, the "purpose" is the task order or grant activity; documentation must tie the trip to the funded work.
GSA Method vs IRS High-Low
Government travel almost always uses the GSA per-locality method (exact city rates). The IRS high-low method ($319 high / $225 low for FY2026) is a commercial shortcut and is rarely the right fit for billed government travel, where the specific GSA rate is usually required by the contract or grant. Confirm which method your agreement specifies before reimbursing.
Common Disallowances
- Billing standard rate in an NSA. Use the city-specific cap or the cost is questioned.
- Forgetting the 75% first/last day. Over-billing M&IE on travel boundaries is a classic audit flag.
- Mixing personal and business days. Only travel days tied to the funded work are reimbursable.
- Missing business purpose. Without it, the expense fails the accountable-plan test.
Build an Audit-Ready Itinerary
Use the DayFig trip calculator to produce a dated, per-city itinerary that applies the correct monthly lodging cap and the 75% rule, then attach the GSA rate table reference. For commercial teams that also travel, the high-low guide explains when the two-rate shortcut is allowed.
Sources: GSA Per Diem Bulletin FTR 26-01 and GSA per diem API (FY2026, retrieved 2026-08-19); FTR §301-11.101; IRS Rev. Proc. 2019-48; Treas. Reg. §1.62-2. Not tax or legal advice.