Per Diem Rates FY2027: GSA Lodging and M&IE Explained

Per diem rates are fixed daily allowances for lodging, meals and incidental expenses on business travel. For FY2027 (October 1, 2026 to September 30, 2027), the GSA standard rate is $113 a night for lodging and $68 a day for meals and incidentals, with higher rates in about 295 cities and counties. Businesses use these rates to reimburse employees tax-free, and freelancers use them to bill clients and simplify meal deductions.

Below: the FY2027 numbers, the IRS high-low alternative, the partial-day rules, a worked trip example, and how to invoice travel costs. This is general information, not tax advice.

FY2027 per diem rates at a glance

GSA announced the FY2027 rates in the Federal Register notice of September 10, 2026. The standard lodging rate rose $3 after a freeze in FY2026, while M&IE stayed the same.

Component	FY2026	FY2027
Standard CONUS lodging	$110	$113
Standard CONUS M&IE	$68	$68
Total standard daily rate	$178	$181
M&IE tiers for non-standard areas	$68 to $92	$68 to $92
Non-standard areas (NSAs)	296	295

Look up any destination on the GSA per diem tool by city or ZIP code. Many NSAs have seasonal lodging rates, so a beach town may have one rate in summer and another in winter. Alaska, Hawaii and US territories use Department of Defense rates, and foreign locations use State Department rates.

How the M&IE rate breaks down

The M&IE amount covers breakfast, lunch, dinner and incidental expenses such as tips to porters and hotel staff. When a meal is provided, for example at a conference, federal travelers deduct that meal from the allowance. Private employers often follow the same practice. Incidental expenses alone are $5 per day, a figure that matters when no meals are claimed.

IRS high-low per diem rates for 2026-2027

Private employers can use a simpler two-rate system. IRS Notice 2026-60 sets the rates for travel on or after October 1, 2026.

Rate type	High-cost localities	All other CONUS
Combined lodging and M&IE	$329	$230
M&IE portion	$86	$74
Transportation industry M&IE	$80 (any CONUS location)	$80
Incidentals only	$5	$5

High-cost localities are those with a federal per diem rate of $280 or more. Employers who used the old rates for the first nine months of 2026 may continue with them through December 31, 2026, or switch to the new rates, but must apply the choice consistently.

Partial days and the 75% rule

• Departure and return days: 75% of the M&IE rate. At $68, that is $51.
• Full days in between: 100% of M&IE.
• Lodging: per night actually away from home, not per calendar day.
• Same-day trips: no per diem for lodging or M&IE is allowed tax-free, because you are not away from home overnight.

Worked example: a four-day client trip

Illustrative: a consultant's employee travels Monday to Thursday to a county with the standard rate, staying three nights. The client pays for lunch on Tuesday, and the company's policy deducts provided meals at the GSA lunch value (assumed $18 here for illustration).

Day	Lodging	M&IE
Monday (travel day)	$113	$51 (75%)
Tuesday	$113	$68 - $18 = $50
Wednesday	$113	$68
Thursday (travel day)	None	$51 (75%)
Total	$339	$220

Maximum tax-free reimbursement: $559, provided the hotel actually cost at least $113 a night or the company reimburses lodging at actual cost. If the company pays a flat $100 per day for meals instead, the amount above the federal rate is taxable wages.

Per diem for employees vs the self-employed

Question	Employees (accountable plan)	Self-employed
Can use lodging per diem?	Yes	No, actual cost only
Can use M&IE per diem?	Yes	Yes, for deduction purposes
Can use high-low method?	Yes	No
50% meal limit	Applies to the employer's deduction	Applies to your deduction
Records needed	Dates, place, business purpose	Dates, place, purpose, lodging receipts

Per diem payments to employees only stay tax-free under an accountable plan, which requires substantiation and return of excess advances. For the deduction side, our guide to the business meals deduction explains the 50% limit, and for driving costs see the 2026 IRS mileage rate.

How to look up a per diem rate

1. Find the destination, not the airport. Rates are set by county or city, so use the address of where you will actually stay or work.
2. Check the travel month. Seasonal NSAs show different lodging rates by month.
3. Note the M&IE tier listed next to the lodging rate, and the breakdown of breakfast, lunch, dinner and incidentals in the M&IE table.
4. Save a screenshot or PDF of the rate with your trip records, especially if the rate changes on October 1 mid-trip.
5. Apply the rate for each day based on where you stay that night; a trip covering two cities uses two rates.

Example: using the high-low method for a sales trip

Illustrative: an employee travels Tuesday to Friday, staying three nights in a city on the IRS high-cost list, and the employer uses the high-low method.

Day	Allowance	Amount
Tuesday (departure)	Full combined rate for the night ($329 includes $86 M&IE; M&IE reduced to 75%)	$307.50
Wednesday	Full combined rate	$329.00
Thursday	Full combined rate	$329.00
Friday (return)	75% of $86 M&IE only	$64.50
Total		$1,030.00

The employer does not need to look up the specific city rate, only whether the city is on the high-cost list. That simplicity is why many companies with frequent travelers prefer the high-low method. Employers can also pay a lower amount and still treat it as substantiated; only amounts above the rate are taxable.

Things per diem does not cover

• Lodging taxes. GSA lodging rates exclude hotel taxes, which are reimbursed separately as actual costs.
• Transportation. Airfare, rental cars, rideshares, parking and mileage are separate expenses.
• Business costs at the destination, such as printing, equipment rental or client entertainment.
• Personal days. If you add vacation days to a business trip, per diem only applies to business days and necessary travel days.

Keep these items on a separate expense report or invoice line so the per diem amount stays clean.

Example: a freelancer deducting meals with the M&IE rate

Illustrative: a self-employed photographer spends five days (four nights) shooting a wedding and related events in a location with a $74 M&IE rate.

1. Travel days: 2 x 75% x $74 = $111.
2. Full days: 3 x $74 = $222.
3. Total M&IE: $333.
4. Deductible meal portion: the meals part of M&IE is subject to the 50% limit; incidentals of $5 per day are not. Roughly ($333 - $25) x 50% + $25 = $179.
5. Lodging: deducted at the actual hotel cost from receipts, not the per diem rate.

If the photographer's contract lets them bill travel to the client, they could invoice the full $333 M&IE as a reimbursable cost, plus actual lodging and mileage, and report the reimbursement as income with the expenses deducted on Schedule C.

Per diem for S corporation owners

An S corporation owner who works for the company is an employee, so the company can pay per diem under its accountable plan. However, IRS rules treat an employee who owns more than 10% of the business as related to the employer, and such owner-employees cannot use the per diem rate to substantiate lodging. They can still be reimbursed for actual lodging costs with receipts and can use the M&IE rate for meals. Partners and sole proprietors follow the self-employed rules above.

Step by step: setting a per diem travel policy

1. Choose a method: GSA locality rates, IRS high-low, or actual expenses.
2. Write it down as part of your expense policy, including how provided meals are handled.
3. Require a trip report with dates, destination and business purpose. An expense report template keeps this consistent.
4. Pay on time, either as an advance close to the trip or reimbursement after.
5. Treat excess as wages if you pay above the federal rate.
6. Update rates every October 1 when GSA and the IRS publish new figures.

How to bill clients for per diem

Many contracts, especially government and nonprofit work, allow travel at GSA rates. To bill it cleanly:

• Agree in the contract whether travel is billed at per diem, actual cost, or a flat trip fee.
• Show travel as separate line items: lodging (actual or capped), M&IE days at the rate, mileage or airfare.
• Note the location and dates so the client can check them against the GSA rate.
• Decide whether travel time is billable; see how to bill for travel time.
• Do not add markup to pass-through costs unless your contract allows it. Our guide to reimbursable expenses on an invoice covers the layout.

Common per diem mistakes

• Using last year's rates after October 1.
• Paying full M&IE on travel days instead of 75%.
• Paying per diem for local, same-day trips, which makes the payment taxable.
• Self-employed people claiming lodging per diem instead of actual hotel costs.
• Missing documentation. Per diem replaces receipts for amounts, not proof of the trip itself. Track it with your other self-employed tax deductions.

Invoice travel costs the easy way

Clear travel line items speed up client approval and reimbursement. You can add lodging, M&IE days and mileage as separate lines with our free invoice generator: no sign-up, and the invoice downloads as a PDF ready to send.