What Is Per Diem in 2026?
Two parts: lodging and M&IE
- Lodging — reimburses the hotel room, up to the locality cap, only for nights stayed.
- Meals & incidental expenses (M&IE) — a flat daily food/tips/laundry amount; on travel days at each end you get 75% of the M&IE rate.
2026 federal rates at a glance
| Component | Standard rate | Note |
|---|---|---|
| Lodging cap | $110 / night | Holds across standard CONUS |
| M&IE (full day) | $68 / day | $51 on first/last travel day (75%) |
| Total standard | $178 / day | $110 + $68 |
| Non-standard M&IE tiers | $74–$92 | ~300 higher-cost localities |
Tax treatment
Properly accounted per diem (at or below federal rate, with records) is a reimbursement, not wages — generally tax-free to the employee. The IRS high-low method for Oct 2025–Sep 2026 sets $319/day for high-cost localities and $225/day for others, with $86/$74 meal portions. A "per diem" label on a paycheck with no travel behind it is just taxable wages.
Frequently Asked Questions
What does per diem cover?
Per diem is a flat daily allowance for business-travel costs: lodging (hotel), plus meals and incidental expenses (M&IE) such as tips and laundry. It does not cover transportation (airfare, rental car) or personal spending.
Who sets per diem rates?
For U.S. federal and most private travel, the General Services Administration (GSA) sets CONUS rates each fiscal year (effective October 1). The State Department sets rates for foreign (OCONUS) travel. Many private employers adopt the GSA table as their standard.
Is per diem taxable in 2026?
Per diem paid at or below the federal rate and properly substantiated is generally not taxable to the employee. Amounts above the federal rate, or unsubstantiated payments, can become taxable wages. The IRS high-low method ($319 high-cost / $225 other for Oct 2025–Sep 2026) simplifies substantiation.