Per Diem rates are set for each fiscal year and are announced and effective on October 1st of every year. You can always visit the official website of the United States General Services Administration to learn the current per diem rates. Here you can learn the details and find out more about per diem rates for 2023.
Basically, per diem is an allowance paid, which is paid to employees for their incidental expenses during their travel, meals, and accommodation. This allowance is paid in addition to the actual travel expenses of the employees.
It is worth noting that these rates vary depending on what state you are working in. Although some private-sector companies may also follow these rates, they pay higher per diem most of the time. However, these rates announced on the United States General Services Administration website are often paid to federal employees.
Per diem rates are not part of your wage.
Most people are confused about per diem rates, and some believe that they are part of their wages. However, it is completely a separate payment. In addition, if the employee’s payment is less than the federal per diem rate, the employee can give an expense report to the employer.
In these reports, information such as the business purpose of the trip, receipts for lodging, and the date and place of the trip should be included. In addition, these receipts should be calculated from the per diem rate for the meals.
Per Diem rates for 2023 become effective after October 1st.
Keep in mind that these new rates will be effective on October 1st, and if you have to travel before that date, you will have to use Per Diem rates 2022. Each employee also files an expense report with their employee to request their per diem payment. This report should be filed within sixty days of the return.
If the employee fails to report these expenses on time, then the payment will be taxable to the employee. There are three conditions that can make the per diem payments taxable for the employee. Other than these, per diem payments are not taxable.
These conditions are: when the employee doesn’t file any report to the employer within 60 days; when the report doesn’t include the business purpose, amount, place, time, and date of the expense; and when a flat amount is provided to the employee, and no report is needed.
Per diem rates do not cover every expense. However, it covers all meals, laundry, pressing of clothing, dry cleaning, room service, as well as tips and fees for the people providing services.
We expect a slight increase in the new per diem rates for 2023. However, we all have to wait a couple of weeks to learn the new rates. As we noted before, you can always visit the United States General Services Administration website to learn the current rates.