Are per diems tax-free?

Per diems are considered non-taxable because they are classified as reimbursements rather than additional income for the employee.

Do per diem rates change based on the city where my company is based?

The city where your company is based does not impact per diem rates. Instead, the per diem rates are determined by the destination and the duration of a trip. The rates for each city, such as per diem in Munich, Germany, or per diem in Stuttgart, Germany, do not depend on the city where your company is headquartered.

How can I manage per diem rates alongside my expense management processes?

The best travel and expense management software offers tools to help you establish corporate per diem policies as well as automate and streamline per diem expense reporting.

Per diem rates in Germany: A brief guide

If your Google searches look anything like this — “calculating per diem rates Germany” or “per diem in Frankfurt, Germany” — we get it. Working out what per diem rates for Germany cover, how much employees can claim, and under which circumstances they can do so can be complicated.

Whether you’re an accountant, financial manager, or business traveller, understanding the per diem Germany guidelines ensures that all travel expenses are accurately budgeted for and properly reimbursed.

In this article, we break down the complex guidelines surrounding per diem in Germany to help you easily manage travel expenses and compliance.

What are per diem rates for business travel?

Per diem is Latin for “for each day”, and per diem rates for business travel refer to fixed amounts that employers pay their employees to cover the costs of accommodation, meals, and incidental expenses incurred while travelling. This is intended to remove the administrative burden of employees submitting individual receipts for expense reimbursements.

Governments usually set benchmark allowances for travel that account for factors such as average maximum accommodation costs, the general cost of living, and any travel regulations. Per diem rates vary depending on the destination for business travel and sometimes where the company is based, including some major cities and business hubs.

Customise your corporate policy with per diem guidelines with our travel policy for employees template.

Are per diem rates mandatory?

Employers are not obliged to follow per diem rates. They can decide whether employees should submit expense reports or they can choose which per diem rates to apply.

For example, a company might use per diem rates for meals and incidental expenses, but implement its own corporate travel policy to set accommodation and flight costs.

What are the most important things to know about per diem rates in Germany?

Per diem rates in Germany are set by the German government, and the rules are laid out in the country’s Income Tax Act.

The rates vary based on the duration of travel and the destinations employees travel to. There are also different allowances depending on whether business trips are domestic or international and if employees travel for a multi-day business trip with an overnight component.

What expenses are covered by per diem rates for Germany?

The guidelines surrounding German per diem rates refer to only two expenses:

Meals purchased during business trips

Costs for private non-commercial accommodation

What expenses aren’t covered by per diem rates for Germany?

As mentioned above, employers aren’t forced to adhere to per diem allowances for Germany. In fact, the guidelines on German per diem rates don’t account for certain expenses.

Although the following expenses aren’t covered, employees will submit expense claims for them to their employer:

Flights

Hotels or other commercial accommodation

Ground transportation to/from airports and to/from meetings

Meals and other incidental expenses while meeting clients

Take control of employee expenses and per diem allowances with leading travel and expense management software.

How are per diem rates in Germany calculated for domestic and international trips?

While per diem rates in Germany are fixed amounts for meals and accommodation costs, these allowances vary depending on several factors, such as whether the trip is domestic or international and the trip duration. Let’s take a look at some of the per diem Germany guidelines.

Per diem rates during domestic and international trips

According to the official Income Tax Act document, the per diem flat rate for overnight stays is €20 and is only applicable in cases where the employee will be reimbursed.

Daily allowances for meals bought during business travel within Germany vary based on whether employees are travelling for one or more calendar days. Here are some important details to note.

One-day business trips

For business trips under 8 hours, no meal allowance is provided.

Business trips between 8 and 24 hours are subject to a reduced meal allowance rate.

Multi-day business travel

Rates for multi-day business trips can be divided into three categories:

Full days (24 hours), where the full meal allowance applies

Arrival/departure days, where the reduced meal allowance rate applies

Overnight packages include allowances for accommodation and food

Here are the current per diem rates for Germany based on the duration of business travel:

One-day trips

Per diem rates Germany 2024

Under 8 hours

No allowance

Between 8 and 24 hours

€14

Multi-day trips

Per diem rates Germany 2024

Arrival and departure day

€14

Full days/24 hours

€28

Overnight stay packages (accommodation allowance)

€20

Per diem rates for domestic and international trips: A quick example

Employee A, based in Munich, travels to Berlin on Tuesday. They stay in Berlin for three nights and depart for Munich on Friday.

Here are the per diems that Employee A is entitled to for meals and accommodation:

Tuesday (classed as the day of arrival): €14 meal allowance

Wednesday (full day): €28 meal allowance

Thursday (full day): €28 meal allowance

Friday (classed as the day of departure): €14 meal allowance

3 overnight stay packages: €60

Are there different guidelines for accommodation and meal allowances when employees travel internationally?

The short answer is yes — and if your employees travel internationally, you need to know how these guidelines apply.

The Income Tax Act lists three exceptions to the per diem rates when employees travel abroad:

There is a lump sum allowance for additional meal expenses for absences lasting at least 24 hours per calendar day.

There is a lump sum allowance for additional meal expenses for arrival and departure days and absences exceeding 8 hours per calendar day.

A separate accommodation allowance applies for overnight stays in foreign countries.

These allowances vary depending on the destination country. Plus, they may also vary depending on the specific city within the country the employee is travelling to.

For example, while the accommodation allowance for Barcelona is €144 per night, the value for the Canary Islands is €103. In India, the lump sum meal allowances range from €21 to €50, while the accommodation allowances range from €85 to €185, depending on which city the employee travels to.

The table below is intended to illustrate a sample of the variations in accommodation and additional meal allowances based on different destination countries and cities.

Country/City

Lump sum allowance for additional meal expenses for absences lasting at least 24 hours per calendar day (€)

Lump sum allowance for additional meal expenses for arrival and departure days and absences exceeding 8 hours per calendar day (€)

Accommodation allowance (€)

United States of America (USA)

63 (Boston), 62 (Houston)

42 (Boston), 41 (Houston)

333 (Boston), 204 (Houston)

Australia

74 (Canberra), 57 (Sydney)

49 (Canberra), 38 (Sydney)

186 (Canberra), 173 (Sydney)

Italy

42 (Milan), 48 (Rome)

28 (Milan), 32 (Rome)

191 (Milan), 150 (Rome)

Portugal

111

Finland

171

Ireland

129

Estonia

Kuwait

241

Sweden

140

Burundi

138

Are the per diem rates different in some of the key German cities?

With exceptions to per diem rates at both national and city levels, it stands to reason that rates in Munich, Berlin, Stuttgart, Ramstein, and other key German cities and business hubs might vary.

However, while the destination city impacts the rates, the company’s base location does not.

Benefit your business with a better understanding of per diem rates in Germany

Whether your employees are travelling domestically or further afield to France, Spain, or The Gambia, understanding per diem rates for Germany ensures consistent, compliant, and accurate expense management, no matter the location. Using per diem allowances can also reduce the administrative work needed to settle expense claims and reimbursements.

Travel management platform TravelPerk has plenty of features and integrations to help you with seamless business travel and expense management. Get in touch today to discover how TravelPerk can streamline and simplify your travel expense processes.

Book, organise and control your business travel, all in one place.

Frequently Asked Questions

Are per diems tax-free?
Do per diem rates change based on the city where my company is based?
How can I manage per diem rates alongside my expense management processes?

Per diem rates in Germany: a brief guide (2024)