What is a per diem rate?

Key principles of per diem rates:

What is the purpose of a per diem rate?

• A set daily rate to cover business travel expenses.
• The expense categories typically include meals, lodging, and incidental costs.
• Reduces the need for employees to submit itemised receipts, making expense reporting easier and simplifying reimbursement.

How does per diem help with policy compliance?

• Ensures expenses remain within company policy limits.
• Provides uniform rates for all employees, simplifying budgeting and financial planning.

Example of a per diem

An employee travelling for work is allocated a per diem rate of €50 per day for meals and €100 per day for lodging. Regardless of actual spending, the employee is reimbursed based on these fixed rates, provided they comply with the company’s travel policy.

The benefits of per diem rates

• Ease of use – Simplifies expense reporting and reduces administrative workload.
• Predictability – Helps businesses budget and control costs more effectively.
• Compliance – Ensures travel expenses align with company policies.
• Efficiency – Speeds up the reimbursement process by avoiding complex expense documentation.

Per diem rates provide a structured, efficient approach to business travel expense management, balancing employee convenience with company control. Read about EU's current per diem rates here.

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