Increases to Per Diem Rates for Business Travelers for 2022-2023

The IRS announced per diem rates will increase starting October 1, 2022 (Notice 2022-44). In lieu of tracking specific expenses for lodging, meals, and ordinary incidental business expenses, per diem reimbursement can be offered to employees when they are traveling. The per diem allotments can then be claimed as expenses by the business on its taxes.

Fiscal Year 2023 rates

per diemThe per diem rate for travel after September 30, 2022:

  • High-cost areas within the continental United States: $297 ($223 for lodging and $74 for meals and incidental expenses)
  • For all other areas within the continental United States: $204 ($140 for lodging and $64 for meals and incidental expenses)

Compared to 2022 per diems, the high and low-cost area per diems increased by $1 and $2, respectively.

Be aware, this method is subject to various rules and restrictions. Companies that use the high-low method for an employee must continue using it for all reimbursement of business travel expenses within the continental United States during the calendar year. However, the company may use any permissible method to reimburse that employee for travel outside the continental United States.

For travel during the last three months of a calendar year, employers must continue to use the same method (per diem or high-low method) for an employee as they used during the first nine months of the calendar year. Note that per diem rates can’t be paid to individuals who own 10% or more of the business.

Questions

Contact us for more information about using per diem rates at your business.

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