4 ms·

I think one big difference would be taxes. A per diem over expenses would be considered compensation, and would involve both income and payroll taxes. Otherwise

I think one big difference would be taxes. A per diem over expenses would be considered compensation, and would involve both income and payroll taxes. Otherwise, I'd work for free, have the company give me a per diem of X a day and just not pay taxes on it and the company wouldn't pay payroll taxes either! The government is strongly incentivized to make sure that employers can't give employees untaxed money.

ghaff 8y ago
I don't think that's necessarily true. The per diem would presumably need to be reasonable, e.g. based on the (low) government per diem for the location. I know in my case, most expenses are itemized but you can expense a small fixed daily amount if you stay with friends. (I assume the thinking is that you buy some groceries, a bottle of wine, etc. when you stay with people that you can't really expense.)
- gamblor956 8y ago
  US government per diems are actually quite high. The standard per diem for daily food is roughly $50...and more than that in high-expense locations like LA, SF, DC, etc. There is a separate per diem that can go toward lodging, which is significantly higher and generally would cover the cost of most hotel stays excluding resorts or 4 or 5 star hotels.
  - lostapathy 8y ago
    Correct - and incidentally these are the limits allowed by the IRS if employers choose to compensate you that way. There are some limits - like if you are at a conference that serves food, you get a deduction for that based on which meal. that's why a lot of conferences have some amount of food around but not technically "Breakfast" in the morning, because it would make people lose part of their per diem. I used to work in state government and at a fed contractor. Travel department booked our hotel, generally subject to said per diem amounts (interestingly, our hotel contracts were almost almost exactly the limit) and we never got to pocket anything on that. Food we just got paid the IRS limit (including calculation for partial days and otherwise provided meals) and we did not have to submit receipts on that. It was certainly enough to eat well enough and go home with a little extra, especially since I don't really eat breakfast. It's really note enough to hit the booze hard on, though. People who drank on trips hated it, people who don't drink much came out ok. Some of my poorer/cheaper co-workers would pick up food at a corner store, make sandwiches in their room, and end a week trip with $150 in their pocket and were stoked about it.
    - nfriedly 8y ago
      Yep, at my last job, I was one of those guys who would buy a bag of groceries at the beginning of the trip and end up with extra cash at the end. I thought it was great. My current job just reimburses actual expenses up to a daily limit. On my very first trip, I bought my bag of groceries on day one and it ended up at about double the limit. They told me that that violated the policy, but they'd make an exception and approve just that once. Now I just eat out like everyone else and don't bother with groceries :/

ghaff 8y ago

I don't think that's necessarily true. The per diem would presumably need to be reasonable, e.g. based on the (low) government per diem for the location. I know in my case, most expenses are itemized but you can expense a small fixed daily amount if you stay with friends. (I assume the thinking is that you buy some groceries, a bottle of wine, etc. when you stay with people that you can't really expense.)

gamblor956 8y ago
US government per diems are actually quite high. The standard per diem for daily food is roughly $50...and more than that in high-expense locations like LA, SF, DC, etc. There is a separate per diem that can go toward lodging, which is significantly higher and generally would cover the cost of most hotel stays excluding resorts or 4 or 5 star hotels.
- lostapathy 8y ago
  Correct - and incidentally these are the limits allowed by the IRS if employers choose to compensate you that way. There are some limits - like if you are at a conference that serves food, you get a deduction for that based on which meal. that's why a lot of conferences have some amount of food around but not technically "Breakfast" in the morning, because it would make people lose part of their per diem. I used to work in state government and at a fed contractor. Travel department booked our hotel, generally subject to said per diem amounts (interestingly, our hotel contracts were almost almost exactly the limit) and we never got to pocket anything on that. Food we just got paid the IRS limit (including calculation for partial days and otherwise provided meals) and we did not have to submit receipts on that. It was certainly enough to eat well enough and go home with a little extra, especially since I don't really eat breakfast. It's really note enough to hit the booze hard on, though. People who drank on trips hated it, people who don't drink much came out ok. Some of my poorer/cheaper co-workers would pick up food at a corner store, make sandwiches in their room, and end a week trip with $150 in their pocket and were stoked about it.
  - nfriedly 8y ago
    Yep, at my last job, I was one of those guys who would buy a bag of groceries at the beginning of the trip and end up with extra cash at the end. I thought it was great. My current job just reimburses actual expenses up to a daily limit. On my very first trip, I bought my bag of groceries on day one and it ended up at about double the limit. They told me that that violated the policy, but they'd make an exception and approve just that once. Now I just eat out like everyone else and don't bother with groceries :/