The General Services Administration (GSA) has released its annually updated list of federal maximum per diem rates employers may use to reimburse expenses incurred by employees who travel on business to locations within the Continental United States (CONUS). The rates are effective for travel on or after October 1, 2013. Notice of GSA Per Diem Bulletin FTR 14-01, Fiscal Year 2014 Continental United States (CONUS) Per Diem Rates, 78 F.R. 54651, Sept. 5, 2013.
Instead of paying or reimbursing employees for their actual lodging, meal and incidental expenses, employers may pay employees a per diem allowance - a flat amount for every day they travel on business. Per diems include separate components for hotels and for meals and incidental expenses (M&IE).
Employers may substantiate allowable expenses using the GSA per diem rates for travel to CONUS locations, so long as employees substantiate the time, place and business purpose of the expense.
GSA Per Diem Rates
Per diem allowances that are equal to or less than the federal rates for the locality of travel are excluded from an employee's taxable income, while per diem allowances that exceed the federal rates are treated as taxable wages subject to employment taxes to the extent of the difference between the allowance and the federal rate.
For fiscal year 2014, the standard CONUS lodging rate is increased to $83 (from $77 in 2013). Adjustments for 2014 in non-standard lodging rates vary depending on changes in the local market for the cities and locations listed. The six M&IE rates for 2014 are unchanged from 2013: $46, $51, $56, $61, $66 and $71.
For all locations within CONUS not shown on the list, the lodging per diem rate is $83 and the M&IE rate is $46. The combined maximum standard per diem rate is $129. The combined rates for the listed locations range from a low of $129 (off-season) for several locations to a high of $374 (peak season) for New York City.
The 2014 GSA Per Diem Bulletin also adds some new non-standard areas to the list, modifies existing non-standard areas on the list and moves various locations that were non-standard areas in fiscal year 2013 to the standard CONUS rate category.
Other Per Diem Rates
Note that the Internal Revenue Service also provides a simplified "high-low" method employers may choose to use instead of the GSA per diem rates, which designates, in a list, various localities as "high-cost" and others as "low-cost," as well as special meal and incidental expense rates for the transportation industry and a rate for the incidental-expenses-only deduction.
The Department of Defense updates the per diem lodging and M&IE rates for travel in non-foreign areas outside the continental US (OCONUS), including Alaska, Hawaii, Puerto Rico and the US territories. Revisions to rates are made in "Civilian Bulletins" throughout the year and are announced in the Federal Register, the most recent of which is effective July 1, 2013.
The Department of State updates the per diem lodging and M&IE rates for travel in foreign areas. These rates are not announced in the Federal Register, but are published on the agency's website.