The “high-low” per diem method is a simplified way to reimburse employees who travel for your business compared to tracking actual lodging, meal and incidental expenses. For most areas within the continental United States, the per diem rate for October 1, 2025, through September 30, 2026, is $225. For “high-cost” locations within the continental United States, the per diem rate is $319. However, certain locations are considered high-cost areas only on a seasonal basis.
Businesses that use per diem rates typically don’t require employees to provide receipts. They must, however, still substantiate the time, place and business purpose of the travel. Reimbursements made on a per diem basis aren’t generally subject to income or payroll tax withholding or reported on the employee’s Form W-2. Note that per diem rates can’t be paid to individuals who own 10% or more of the business.