What's in this template
A twelve-section policy with the FY2027 GSA rates already in it, a placeholder index for the values you have to decide, and four appendices.
| Section | Contains | |
|---|---|---|
| 1 | Purpose and scope | Who the policy covers and how it fits with the travel and expense policy. |
| 2 | Definitions | Per diem, lodging cap, M&IE, incidentals, travel status, work location. |
| 3 | When per diem applies | Overnight stays, the distance threshold, day trips, personal days, extended assignments and the one-year rule. |
| 4 | Rates | GSA by location and month, FY2027 standard rates, where to look them up, OCONUS and foreign sources. |
| 5 | Lodging | Actual cost up to the cap before taxes, fees inside the cap, taxes paid separately, over-cap approval limit, folio required. |
| 6 | Meals and incidentals | Flat daily M&IE, no receipts, what incidentals cover, the $5 floor. |
| 7 | Travel days and provided meals | 75% on the first and last day, deductions for provided meals, what is not deducted. |
| 8 | Advances | Who can get one, how much, and when it is repaid. |
| 9 | Documentation and submission | What the report contains, attachments, the filing deadline, approval turnaround. |
| 10 | Tax treatment | Accountable plan language, what becomes taxable wages, 10% owners, contractors. |
| 11 | Exceptions and approvals | Over-cap approvals, paying the difference personally, who approves the approver. |
| 12 | Enforcement and review | Returned reports, misconduct, the annual October review. |
| Appendix A | FY2027 reference rates: $113 lodging, $68 M&IE, tiers to $92, $5 incidentals, 75% travel days. | |
| Appendix B | Provided-meal deduction table for every M&IE tier. | |
| Appendix C | Worked three-day example with a provided lunch and an advance. | |
| Appendix D | Swap-in clauses for a flat company rate or the IRS high-low method (Notice 2026-60). |
The policy is a starting point. If your team books on Engine, the lodging cap in section 5 is enforced at booking and the folio in section 9 is already on the reservation. Travelers file their trips on the companion per diem expense report template.
What is a per diem policy?
A per diem policy says how a company pays lodging and meals for overnight work travel. Lodging is reimbursed at actual cost up to a nightly cap. Meals and incidentals are paid as a flat daily amount with no receipts. The policy names the rate source, the days that qualify, what reduces the allowance, what the traveler has to file, and what the IRS treats as wages.
Two-thirds of the public-sector policies we read follow the federal rules in 41 CFR 301-11 and the GSA rate tables, and about a third of the private company policies do, because the IRS uses the federal rate as the ceiling for tax-free per diem. The template follows those rules and marks every place a company can choose differently.
Who should use this template
- Companies paying per diem for the first time, usually when crews or field teams start traveling and meal receipts become a problem.
- Finance and HR teams replacing a one-paragraph "we pay GSA" line with rules that hold up at expense review and on audit.
- Government contractors and grant-funded organizations whose contracts require federal per diem treatment.
Which rate basis should you use?
GSA by location, unless you have a reason not to. It is the ceiling the IRS uses, the rates are published, and the template defaults to it. Appendix D has the two alternatives.
| Method | How it works | Fits | Watch out for |
|---|---|---|---|
| GSA rates by location | Lodging cap and M&IE for the work location and month, from gsa.gov. About 300 named destinations plus a standard rate. | Teams that travel to many cities, anyone reimbursing government or grant-funded work. | Rates change by month in many cities and every October 1. The cap needs enforcing at booking. |
| One flat company rate | The same lodging and M&IE amount everywhere, set by the company. | Crews that work the same few regions, companies that want one number to explain. | Anything above the GSA rate for the location is taxable wages. A rate that works in Lubbock will not book a room in Boston. |
| IRS high-low | Two combined rates for the continental US: $329 a day in listed high-cost localities, $230 everywhere else (Oct 2026 to Sep 2027). | Finance teams that want simple substantiation and do not mind overpaying in cheap cities. | Each employee on it stays on it for the full calendar year. The high-cost list changes each fall. Self-employed travelers and 10% owners cannot use it. |
For FY2027 the GSA standard rate is $113 for lodging and $68 for M&IE, with named destinations running up to $92 for M&IE. Look up any city and month on the per diem rates lookup, which also shows what class of hotel the cap usually covers there. Whatever basis you pick, the cap only works if the booking tool applies it. Engine admins set caps by location once and every hotel search is checked against them.
Six rules to check before you publish
Company policies drift from the federal rules most often in these six places.
When per diem is paid
The template requires an overnight stay. Federal employees get 75% of M&IE on a day trip over 12 hours, but the IRS requires an overnight stay for a meal allowance to be tax-free, so same-day meals go to the regular expense policy. It adds a distance threshold placeholder, usually 50 miles, and pays no per diem on personal days, at the regular work location, or for lodging with friends or family (M&IE only).
Lodging at cost, up to the cap
The cap applies to the room rate before taxes. Mandatory hotel or resort fees count toward the cap. Taxes are reimbursed separately, on the capped amount only. The traveler can always pay the difference for a nicer room. The template lets an approver authorize lodging up to a set percentage of the cap when nothing under the cap is available or the event hotel is required. The usual starting point is 150% of the cap (1.5×); the federal ceiling is 300%.
Travel days at 75%
The first and last day of a trip pay 75% of M&IE, whatever time the traveler left or returned. Lodging is not reduced. The flat 75% avoids disputes over departure and return times.
Provided meal deductions
A meal from a conference, a host, a client, or a registration fee is deducted at the GSA breakdown for that meal. Complimentary hotel breakfast and airline snacks are not deducted. The day never drops below the $5 incidental amount. The per diem expense report template does this arithmetic for the traveler.
Receipts and deadlines
Travelers file no meal receipts, but they attach the itemized hotel folio for every night and a per diem report with dates, work location, and business purpose, within 30 days by default. The IRS safe harbor gives 60 days to substantiate, so the template treats reports filed after 60 days as taxable wages and denies reports filed after 90 days unless state law requires payment.
Tax treatment
Per diem at or below the federal rate, substantiated and reconciled against any advance, is not wages. The amount above the federal rate, a report filed too late, and an unreturned advance are wages, withheld and reported on the W-2.
Will a GSA cap work for your company?
For most industries, yes. Across US business hotel nights booked on Engine from September 2025 to September 2026, two in three were at or under the FY2027 GSA lodging cap before taxes and fees, and 94% were within 150% of it. A GSA cap with an approval ceiling of 150% of the cap, the usual starting point in the placeholder index, covers almost every night.
Public administration is highest because those travelers are bound by the cap. Other services is next at 74%. Construction is the largest private group in the data, at 70%. Mining, oil and gas, and real estate are lowest, which is where an approval ceiling of 150% of the cap does its work. Book on Engine with a cap set and the over-cap third is blocked or routed for approval before the trip.
What published per diem policies include
We searched 66 organizations and read the per diem rules in 52 published policies, 24 of them from private companies. Fewer follow the federal rules than you would expect.
| Rule | Policies that state it |
|---|---|
| Uses GSA or federal rates | 26 of 52 |
| Requires a lodging receipt | 40 of 52 |
| Includes a rate table or link | 36 of 52 |
| States the tax treatment | 37 of 52 |
| Allows a travel advance | 31 of 52 |
| Defines incidentals | 27 of 52 |
| Caps lodging (actual cost up to a cap) | 26 of 52 |
| Deducts provided meals | 25 of 52 |
| Requires an overnight stay or minimum hours | 26 of 52 |
| Reduces M&IE on the first and last day | 24 of 52 |
| States a submission deadline | 20 of 52 |
| Has an over-cap exception process | 20 of 52 |
| Pays lodging taxes outside the cap | 16 of 52 |
| Requires meal receipts under per diem | 10 of 52 |
Published travel, expense, and per diem policies located in an October 2026 search of 66 organizations: universities, state and local agencies, school districts, and private companies in construction, logistics, energy, healthcare, and professional services. One policy per organization. The sample is small, so treat the counts as directional.
Two-thirds of public-sector policies (19 of 28) use GSA rates. Private companies split three ways: 7 of 24 use GSA, 5 set a flat company rate for meals (from $36 to $90 a day), and the rest reimburse actual costs with or without a cap. Stated deadlines ran from 7 to 90 days, with 30 and 60 the most common. Only 16 of the 24 policies that reduce the first and last day say 75%.
Sample per diem policy clauses
If you already have a travel policy and do not want a standalone document, copy these five clauses into it. They read as they do in the template.
Rates
[COMPANY NAME] uses the U.S. General Services Administration (GSA) per diem rates for the destination and month of travel. For FY2027 (October 1, 2026 to September 30, 2027) the standard rate is $113 for lodging and $68 for M&IE. The rate in effect on the date of travel applies.
Lodging
Lodging is reimbursed at actual cost up to the GSA lodging cap for the work location and check-in month, based on the room rate before taxes. Mandatory hotel or resort fees count toward the cap. Lodging taxes are reimbursed separately, on the portion of the room rate within the cap. An itemized hotel folio is required for every night claimed.
Travel days and provided meals
On the day of departure and the day of return, M&IE is paid at 75% of the full daily rate. When a meal is provided by a conference, host, or client, or included in a registration fee, its value is deducted using the GSA meal breakdown. Complimentary hotel breakfast and airline snacks are not deducted. A day's M&IE never drops below the $5 incidental amount.
Documentation
Travelers submit a per diem report within [SUBMISSION DEADLINE] days of the trip listing each day in travel status with the date, work location, lodging paid, and meals provided, with the hotel folio attached. Meal receipts are not required.
Tax treatment
[COMPANY NAME] pays per diem under an accountable plan. Per diem at or below the federal rate, substantiated and reconciled against any advance, is not taxable income. Any amount above the federal rate, any per diem paid without a timely report, and any unreturned advance is taxable wages.
How Engine enforces a per diem policy
A written policy sets the cap. Someone still has to stop the $240 room in a $184 city before checkout, and a Word document cannot.
Engine is a free business travel platform used by more than 39,000 businesses. An admin sets nightly rate caps by location, Engine checks every hotel search, cart, and checkout against the cap, and over-cap rooms are blocked, allowed with a stated reason, or sent to a manager. The folio stays on the reservation, and every stay goes on one invoice with department cost tracking. Section 5 of this policy becomes a setting in Engine.
How to roll out a per diem policy
Decide the placeholders first. The index lists them, from the rate basis and distance threshold to the over-cap limit, the deadline, and the advance limit.
Set the caps where rooms get booked. In Engine that is one admin screen. Anywhere else it is a lookup every traveler has to remember.
Give travelers the form. The per diem expense report template applies the 75% rule and the meal deductions for them.
Review every October 1. GSA publishes the new fiscal year rates and the IRS releases the high-low notice every fall. Update Appendix A and the caps in your booking tool the same week.
