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 GSA, DoD, and DoS determine domestic and international rates. Rates vary depending on where you’re going. From Alaska to Rome, New York City to London, 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 the US
In the continental United States (CONUS), domestic per diem rates are established by the U.S. General Services Administration. These are travel allowances that federal employers use to reimburse employees traveling on official government business. However, private employers have the liberty to include per diem rates in their corporate travel policy, independent of the rates set by the federal government, to set standard travel budgets for employees going on business trips. Foreign per diem rates, sometimes referred to as global per diem rates, are established by the U.S. Department of State (DoS), via the Office of Allowances, and the U.S. Department of Defense (DoD). All foreign per diem allowances not related to defense assignments can be found on the DoS website.Foreign per diem rates are revised monthly.You can stay up-to-date by signing up for notifications on changes.For both domestic and international per diem rates, the Internal Revenue Service (IRS) separates expenses into “lodging expenses” and “meals and incidental expenses (M&IE).”Lodging expenses cover accommodation costs in the destination city. The amount, in dollars, is directly available on the DoS website.Multiple allowances are used when determining the M&IE rate. The full list of both domestic and foreign M&IE allowances can be found in Chapter 301-Federal Travel Regulation on the DoS website.. M&IE is split into:- Cost of meals: breakfast, lunch, and dinner in the location city
- Incidental expenses: expenses such as dry cleaning or taxi services
GSA rates for international travel
To determine your M&IE allowance and find out the rate you’re entitled to, access the Department of State foreign per diem list.Let’s say one of your employees is traveling to Perth, Australia. To find the corresponding per diem rates, head to the DoS foreign per diem drop-down box and select your destination.Find out your per diem allowance for your upcoming U.S. trip
Our per diem calculator works out exactly how much you’re entitled to spend when you travel for work.Are international per diem allowances taxed differently?
Taxation on foreign per diem allowances is no different from taxation on domestic per diem rates. As long as they adhere to the regulating authorities’ guidelines, per diem payments are exempt from taxation.The IRS always requires expense reports. Expense reports must be filed for every instance of expenditure, showing the time, place, and purpose of the business trip.Final thoughts on international per diem rates and corporate travel
International per diem allowances aren’t more complicated than domestic rates. They vary depending on the country of origin and destination. However, the way they’re handled is similar.Nowadays, corporate travel isn’t just for big businesses. Small businesses are also sending travelers on business trips more often, and the tax benefits of per diem rates are worth understanding. For more information on per diem rates, check out the rest of the TravelPerk guide on per diem rates.?)
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