Per diem payments are not considered wages—and are therefore non-taxable—as long as they meet certain conditions. You will be subject to taxes if any of the following are true: Payment is more than the allowable federal per diem rate. You did not file an expense report with your employer.

Per diem payments—daily allowances provided to employees for lodging, meals, and incidental expenses while traveling for business—are generally not taxed as long as they do not exceed the official government rates and follow "accountable plan" rules. In 2026, the U.S. General Services Administration (GSA) sets standard rates (currently $178 per day for many areas) that vary by location and season to reflect the local cost of living. If an employer pays an amount that is higher than the GSA's identified "non-standard" rate for a city, the excess amount is considered taxable income and must be reported on the employee's W-2. To keep per diem tax-free, the IRS requires that the travel has a clear business connection, that expenses are accounted for within 60 days, and that any unused advance funds are returned. If an organization does not follow these "accountable plan" protocols, the entire per diem amount becomes taxable. For international travel, many countries like Turkey and the UK also maintain specific "tax-exempt" daily limits that fluctuate based on the exchange rate and local inflation.