Per diem is a term often utilized in federal operations and it refers to the daily rates designated for federal employees operating within the lower 48 continental United States. This allocation is provided as a reimbursement for expenses accrued during official travel tasks. The term ‘per diem’ is Latin in origin, literally translating to ‘per day’, thus, as its name suggests, it is a daily allowance designed to cover the daily costs associated with official out-of-town duties.
This per diem rate is divided into three distinct allowances: lodging, meals, and incidental expenses. The lodging rate is intended to cover the cost of accommodation, while the meal rate covers food and beverage expenses. The incidental expenses rate is designed to cater to other daily necessities that may arise during travel such as laundry, gratuities and transportation costs. General Services Administration (GSA) sets these per diem rates, which are subject to change annually, in accordance with local cost of living estimates and inflation rates.
