Corporate per diem travel policy

International per diem rates

Are international per diem allowances taxed differently?

International per diem rates and corporate travel for Canadian businesses

International per diem rates

International travel involves different per diem rates than domestic corporate travel. Per diem rates depend on the standard cost of traveling to a foreign area and are influenced by the cost of living at the destination. The relevant governing bodies, such as the National Joint Council (NJC) determine domestic and international rates.

Rates vary depending on where you’re going. Whether your employees are traveling to the USA, Argentina, Australia, France or the Netherlands, there are unique international per diem rates for every destination.

Read on to learn how to navigate per diem allowances for your foreign business trips.

How per diem rates for foreign travel are established in Canada

In Canada, the per diem rates are set by the National Joint Council (NJC). The NJC is the forum for co-development, consultation, and information sharing between the government as an employer and public service bargaining agents.

The Canada Revenue Agency (CRA) provides updated per diem rates, including allowances for destinations within Canada and internationally, effective as of April 1, 2021.

Here are the per diem rates for international travel (Canadian dollars - CAD):

Breakfast

Lunch

Dinner

Meal allowance total

Canada (all provinces) & USA

$21.10

$21.35

$52.40

$94.85

Yukon & Alaska

$22.90

$21.00

$60.60

$104.50

Northwest territories

$24.80

$30.05

$64.35

$119.20

Nunavut

$27.75

$33.65

$89.70

$151.10

It's important to note that:

Incidental expense allowance: A flat rate of $17.50 per day is provided for incidental expenses.

Weekend travel to residence: For employees traveling on business but returning home over the weekend, allowances vary:

For a two-day weekend, it’s $324.70 (Canada & USA) up to $437.20 (Nunavut)

A three-day weekend ranges from $487.05 to $655.80

A four-day weekend ranges from $649.40 to $874.40

Private non-commercial accommodation: Employees who opt for non-commercial lodging (like staying with friends or family) are reimbursed at $50.00 per night.

For U.S. travel, the General Services Administration (GSA) ensures that per diem rates match those in Canada but are paid in USD. If you’re traveling to locations like Hawaii, Alaska, or continental U.S. destinations like New York or Chicago, the per diem rates reflect local costs.

Are international per diem allowances taxed differently?

Taxation on foreign per diem allowances is no different from taxation on domestic per diem rates. Employers are not required to report tax-free per diem allowances on the employee's T4 slip. However, if the allowance exceeds the prescribed rates or is not fully used for the intended purpose, the excess amount may be considered taxable income.

While employers are not legally required to submit expense reports themselves, they are responsible for establishing and managing the expense reporting process within their organization.

International per diem rates and corporate travel for Canadian businesses

Managing per diem rates for international travel may seem complex at first, but the principles are similar to domestic travel. The key is ensuring you’re aware of the specific meal allowance, incidental expenses, and other travel expenses that apply to your destination.Whether you’re traveling to Switzerland, Australia, or the United Kingdom, understanding how to navigate international per diem rates can save your business money and simplify the reimbursement process.And, it’s not just large corporations that benefit from per diem allowances; small businesses can also take advantage of these tax-efficient policies. For more information on per diem rates, check out the rest of the TravelPerk guide on per diem rates.

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Corporate per diem travel policy

International per diem rates

How per diem rates for foreign travel are established in Canada

Are international per diem allowances taxed differently?

International per diem rates and corporate travel for Canadian businesses

Make business travel simpler. Forever.

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