What are Per diems?
Per diems are the amount of money up to a certain standard, that each employee may receive per days of the business trips. Per diems are intended to cover employees’ increased costs of living while on a business trip, such as expenses for meals, transportation and accommodation.
Attending work-related educational events, conferences or when traveling away from their main office for business, employees can be entitled to receive per diems. They are also referred as ‘tax-free per diems’, since governments allow to use the money tax free up to certain amount.
The basic structure of a per diem differs from country to other. Depending on the duration of the trip and country of operating, different ratings may apply.
A lot of countries provide certain deductions when spending money on meals (breakfast, lunch, dinner), drinks, hotels.
Per diem rates are based on the per diem rates set by the local government. These lists are updated and published every fiscal year on the website of the specific government.
Per diems are considered a reimbursement for business expenses and are therefore tax free up to the maximum allowable per diem rate. It’s therefore that a lot of companies use the government's per diems as a guideline for their own per diems. Some countries also allow companies to use more than what is defined, but in most cases the ‘extra’ amount is not tax free.
Because applying all those rules and different rates can get tricky, it is best to use a tool in order to calculate.
Benefits of per diems
Companies that use a per diem rate save employees the time that they would otherwise invest in keeping track of expenses, saving receipts, and filling out expense reports upon return from business travel. Employees are allowed to keep the money that they don’t spend while traveling which can encourage thrift and no overspending.
Per diems can be very complex. Taking into account that per diem rules change year by year it can be hard to keep up with all the relevant rules and rates. It is therefore that Rydoo wants to offer a simple and easy solution of managing per diems.
Setting up per diems
You can define your own per diem lists in 'Company Settings' / 'Per diems' - once this option is activated in the advanced settings:
The most common lists can automatically be uploaded by clicking on the ‘Select country’-button and selecting the relevant details:
If you can't find the list you're looking for, you can create on of your own.
Local per diem rates
Via the following links you can check the local per diems regulations from the local government portal.
🇵🇱 Poland (domestic, international)
Create your own
To create your own list you can click on the button '+ Create your own' and follow the steps shown screen per screen:
The basic elements we need from you are the applicable timeframe, the regions and the amounts. On top of this you can add deductions and overnight stays if applicable for your company.
STEP 1: General info.
STEP 2: Customize your list by adding the necessary amount columns, deductions and overnight staying.
STEP 3: Fill in the needed countries and click on the result shown (so the region code is recognised in the background) and fill in the related values.
- Deductions are calculated for you when a percentage is used in STEP 2.
- You can add the option "Rest of the world" if the same value applies for multiple countries.