What does per diem mean in relation to employment?

Category: Per Diem Questions

“Per diem” is a Latin term meaning “per day.” In the context of employment, “per diem” typically refers to a daily allowance that an employee receives to cover expenses incurred while traveling or working away from their home location.

Per diem allowances are often given to employees who are required to travel for business purposes, such as sales representatives, field engineers, or consultants. The per diem amount is intended to cover expenses such as meals, lodging, and incidentals.

Per diem amounts are typically set by the employer, or in some cases by the government, and may vary depending on the location and the type of work being performed. The amounts are usually tax-free, as long as the expenses being reimbursed are incurred while the employee is performing job-related duties.

In some cases, per diem allowances are a fixed amount, while in others they may be a reimbursement of actual expenses incurred. The method of calculating per diem can vary, so it’s important for employees to familiarize themselves with their employer’s policies and procedures regarding per diem allowances.