August 25, 2015–The General Services Administration (GSA) has announced the per diem rates that apply to the lower 48 Continental United States (CONUS) for the federal government’s fiscal year (FY) 2016, which begins October 1, 2015. Per diem rates are flat dollar amounts and are the maximum allowances federal employees are reimbursed for expenses incurred while on official travel. However, any employer may use these rates to reimburse an employee who travels away from home overnight, in lieu of reimbursing his or her actual expenses.
For an employer in the private sector, per diem allowances that are equal to or less than the federal rates for the locality of travel are excluded from an employee’s taxable income. In addition, an employee who receives a per diem allowance does not need to submit substantiation for the expenses covered by the allowance. The employee, however, must continue to substantiate the time, place, and business purpose of his or her travel. Per diem allowances that exceed the federal rates are treated as taxable wages subject to employment taxes to the extent of the difference between the allowance and the federal rate.
The CONUS per diem allowance for an area has three components: a lodging allowance, a meals allowance and an incidental expense allowance (M&IE). Most of the CONUS (approximately 2600 counties) are covered by the standard CONUS per diem rate of $140 ($89 lodging, $51 meals and incidental expenses). This is an overall $11 increase from the FY 2015 rates of $83 and $46, respectively. In FY 2016, there continue to be about 400 Non-Standard Areas (NSAs) that have per diem rates higher than the standard CONUS rate.
For all locations within CONUS not shown on the list, the lodging per diem rate is $89 and the M&IE rate is $51. The combined maximum standard per diem rate is $140. The combined rates for the listed locations range from a low of $140 (off-season) for several locations, to a high of $428 (peak season) for Telluride, Colorado.
The following two new non-standard areas have been added to the list for FY 2016:
- Grand Lake, Colorado, including seasonal periods:
- For the period October 1 – November 30, the lodging rate is $120 and the M&IE rate is $64.
- For the period December 1 – March 31, the lodging rate is $196 and the M&IE rate is $64.
- For the period April 1 – May 31, the lodging rate is $104 and the M&IE rate is $64.
- For the period June 1 – September 30, the lodging rate is $120 and the M&IE rate is $64.
- Pecos, Texas, with a lodging rate of $152 and an M&IE rate of $54.
For the federal government’s 2016 fiscal year, Belle Mead, New Jersey, has been renamed Somerset, which more accurately recognizes the major city in the county. The per diem rate is $140 for lodging and $59 for meals.
The following 15 locations, which were non-standard areas in fiscal year 2015, have been moved into the standard CONUS rate category for 2016:
- Huntsville, Alabama;
- Modesto, California;
- Driggs/Idaho Falls, Idaho;
- Springfield, Illinois;
- Covington/Slidell, Louisiana;
- Hattiesburg, Mississippi;
- Los Alamos, New Mexico;
- Stateline/Carson City, Nevada;
- Oak Ridge, Tennessee;
- Greenville, Texas;
- Fredericksburg, Virginia;
- Norfolk/Portsmouth, Virginia;
- Prince William/Manassas, Virginia;
- Anacortes/Coupeville, Washington; and
- Shepherdstown, West Virginia.
Other Per Diem Rates
Note that the IRS also provides a simplified “high-low” method employers may choose to use instead of the GSA per diem rates, which designates, in a list, various localities as “high-cost” and others as “low-cost,” as well as special M&IE rates for the transportation industry and a rate for the incidental-expenses-only deduction. These rates have not yet been released for FY 2016.
The Department of Defense updates the per diem lodging and M&IE rates for travel in non-foreign areas outside the continental US (OCONUS), including Alaska, Hawaii, Puerto Rico and the US territories. Revisions to the rates are made in Civilian Bulletins throughout the year and are also announced in the Federal Register.
The Department of State updates the per diem lodging and M&IE rates for travel in foreign areas. These rates are not announced in the Federal Register. They are published on the agency’s website.