Wednesday, August 17, 2016


The General Services Administration has released the fiscal year (FY) 2017 travel per diem rates, which will take effect on October 1, 2016.

To find specific CONUS per diem rates go here.

The GSA explains -

GSA establishes the per diem rates for the lower 48 Continental United States (CONUS), which are the maximum allowances that federal employees are reimbursed for expenses incurred while on official travel.

The CONUS per diem rate for an area is actually three allowances: the lodging allowance, the meals allowance and the incidental expense allowance. Most of the CONUS (approximately 2600 counties) are covered by the standard CONUS per diem rate of $142 ($91 lodging, $51 meals and incidental expenses). In fiscal year (FY) 2017, there are about 350 Non-Standard Areas (NSAs) that have per diem rates higher than the standard CONUS rate.

Since FY 2005, NSA rates have been based on Average Daily Rate (ADR) data from the lodging industry, which GSA obtains through a contract with a leading provider of lodging industry data. For more about how per diem rates are determined, visit Factors Influencing Lodging Rates. The ADR is a widely accepted lodging-industry measure based upon a property's room rental revenue divided by the number of rooms rented as reported by the hotel property to the contractor. This calculation provides GSA with the average rate in a given area.”

The GSA per diem rates can be used by employers to reimburse employees for business travel, and the per diems for meals and incidental expenses can be used by unreimbursed employees and the self-employed to claim a tax deduction for business travel.

Self-employed taxpayers filing a Schedule C, and employees who are not covered by an employer reimbursement plan, cannot use the per diem method that includes lodging. To claim a deduction for lodging expenses these taxpayers must substantiate the actual cost.  And corporations cannot use the per diem that includes lodging for owner-employees with more than 10% ownership, based on direct or indirect ownership. 

Similar to how the Standard Mileage Allowance works for business use of your automobile, you can elect to deduct either the actual amount of your out of pocket expenses for meals and “incidental” expenses while away from home on business, or claim the appropriate federal per diem allowance determined by the location of the trip.  If you claim the per diem allowance you do not have to save receipts for actual expenses.

The per diem rates are based on the city where you “lay your head” at night. If your business meetings are in New York City, but you stay overnight at a hotel in New Jersey to get a lower room rate, you would use the New Jersey location to determine the appropriate per diem amount.

You can decide whether to deduct the GSA meals and incidental per diem rate or actual expenses on a trip by trip basis, but you must use the same method for all days within any single business trip. You can use the actual expenses when attending a conference in New York City in May and the per diem rate for an August convention in Las Vegas.

The per diem rate for meals and incidental expenses includes tips given to porters, baggage carriers, bellhops, hotel maids (the “incidental” expenses) – so the actual out of pocket for these incidentals are not deductible if you claim the per diem.

There is also a separate per diem rate for incidental expenses only, to use if you do not incur meal experiences while traveling.  It is currently $5.00 per day.

On the first and last day of a business trip you claim 75% of the per diem amount, unless you can show you leave before breakfast on the first day and return after dinner on the last.


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