Budgeting employee business travel into your company’s financial plan allows for new options in deducting expenses. With Business Travel Per Diems, a portion of your employee’s ordinary and necessary travel expenses may be deducted. This could include lodging, meals, taxis and other travel-related expenses.
However, in order to substantiate such expenses, it’s critical that all receipts and records relating to the expenses are kept. Receipts must note the date, time, place and business purpose of the trip and its expense.
The IRS allow businesses to use business travel per diem rates in lieu of reimbursement for traveling employees. Rates are set by the U.S. General Services Administration (GSA) based on year, city and state.
Business Travel FY 2016 Per Diem Rates
There are three different per diem options available:
- Regular Per Diem Rate | The regular per diem rate is the highest amount the federal government will reimberse employees for expenses while traveling for business.
- Standard Meal Allowance | The standard meal allowance pays for meals and unforseen expenses. The per diem rate varies dependant on locality.
- High-Low Rate | The high-low rate eliminates the need to keep a list of business travel per diem rates for different cities. Currently, the average per diem rate for most U.S. cities is $172, but high-cost cities can rate as high as $259.
The GSA has announced the new FY 2016 per diem rates to be set by default. All per diem rates can be found at gsa.gov/perdiem and will be effective starting October 1, 2015.
For more information, contact your financial advisor to clarify details, rates and options, including what records are required to make diem payments. The Financial Advisors and Boca Raton Accountants at Daszkal Bolton have helped South Florida businesses manage their finances since 1992. With over 130 people in offices in Boca Raton, Fort Lauderdale and Jupiter, Daszkal Bolton continues to lead the way in South Florida Accounting as one of its top accounting firms.
