Other employers may provide enough per diem to cover all of an employee's expected expenses while traveling. For example, they may offer an allowance of $200 per day for lodging and have an employee cover food expenses using their own funds. Some employers may grant a partial per diem. Per diem can cover the following expenses: If a contractor or freelancer works on a project away from the company's office, they may receive compensation to cover the costs of travel, lodging and other expenses. Employees who travel internationally may also receive per diem.Īn organization may also issue per diem payments to contractors or freelancers. These employees may travel to different cities or states and use the per diem their employers give them to cover travel costs. Who receives per diem?Įmployees who accumulate travel expenses receive per diem. Here's an overview of how per diem works. Related: Mileage Reimbursement: Definition, Examples and Tracking Tips How per diem works If employees don't have a company credit card, they can pay for expenses with their own funds and receive reimbursement when they return from their business trip. It's common for employees to charge their expenses to company credit cards and file expense reports. It covers the predicted cost of expenses. No matter the company's payment method, a per diem payment is usually a flat rate that the organization or relevant government body establishes. Some companies issue a check in advance to cover per diem expenses. Each company has a different reimbursement policy that you can find in its travel guidelines. Related: Per Diem Employee: Definition and Tips for Hiring What are per diem payments?Ī per diem payment is an amount a company issues to an employee to compensate them for business expenses. The per diem compensation model contrasts with the standard of employees being paid by the hour (hourly employees) or the month (salaried employees). Per diem employees usually work on a temporary or short-term basis. The employee earns a wage each day they work or based on their assigned quota. Note that per diem, a Latin term that translates to "by the day," may also refer to a form of compensation in which the employer pays the employee daily. Employers usually issue per diem payments via company credit cards or a check they address to the specific employee. The allowance can cover travel, accommodations, meals, and incidentals partially or fully. Per diem refers to the daily allowance that an employer pays to an employee to cover business trip expenses.
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