If you are an employer and you have employees that travel for your business, then you can pay them a per-diem amount instead of reimbursing them for the actual expenses.
If the rate paid does not exceed the IRS-approved maximum (the per-diem rate is broken down by area), and the employee provides simplified substantiation (time, place and business purpose), then the reimbursement is not subject to income- or payroll-tax withholding and isn’t reported on the employee’s W-2. Receipts of expenses are not required.
These rates have increased slightly, so please click on the link above to make sure you are using the correct per-diem amount. Also, some localities have switched from high-cost areas to standard-cost areas and vice-versa.
