Sales Compensation and Expense Allowances

Per diems

When employees need to travel as a part of their job, the organization ordinarily picks up the cost.

Federal government per diem rates can be determined by using one of the following methods:

1. The standard federal per diem rate. It includes all lodging, meals, and incidental expenses. The standard rate for most of the continental U.S. in 2026 is $178. The standard lodging only rate is $110. Per diem rates for non-standard locations can be found online at: www.gsa.gov
2. The standard meals and incidentals allowance (M&IE). This alternative is used when the employee does not have any lodging expense, such as when the employee stays in a company room or with relatives. It covers only meals and incidental expenses. The rate for 2026 is $68 per day. The above resource also has calculations for this category of expense in non-standard areas.
3. The high-low rates. This is a simplified computation with one rate for high cost cities and another for regular locations. The rates remain the same as FY 2025. In FY 2026, the rates are $225 a day in most cities for lodging and meals and $319 a day for high-cost cities. Current high-low rates and high-cost localities may be found in: www.irs.gov.