New IRS Per Diem Rates. Remind Your Accountant

by Carrie Thompson on October 22, 2006

by Carrie Thompson | October 22nd, 2006  

AccountantAs of October 1, 2006, the IRS has updated Per Diem rates for reimbursement for business travel within the continental United States. Per diem is probably the only latin term most people know, but if you’re clueless it means “per day.” As in the amount your employer will give you per day without making you turn in horrid expense report.

Expenses included in the per diem rates are food, hotel and “incidental expenses,” whatever that means. Don’t get excited, incidental expenses amount to a whopping $3.00 per day (I guess I should say per diem). The high-low method breaks down as follows:

  • The over (for high-cost destinations) is $246.00.

  • The under (for the crappy destinations) is $148.00 a day.

I’ve got to tell you, I’m not a big fan of the under. It’s hard to find even a mid-range hotel in some places (even tiny towns in Mississippi) for less than $100.00, even with a AAA discount.

Destination specific rates are also available. Employers cannot switch from the High-Low Method to the Regular Federal Per Diem Rate Method (or vice-versa) before January 1, 2007 so don’t hold your breath for a change for a trip happening next week.

See also IRS Mileage Rate Increase in 2007. Like Money in Your Pocket, Per Diem Update for Expense Reimbursements: IRS Revenue Ruling 2006-56 and

{ 1 comment }

Ed October 22, 2006 at 2:54 pm

My company uses, my guys can usually do their expense reports in 30 seconds or less, so I never have to pay out per diems ;)


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