What are Per diems?
Per diems are the amount of money up to a certain standard, that each employee may receive per day 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 to as ‘tax-free per diems’, since governments allow to use of the money tax-free up to a certain amount.
The basic structure of a per diem differs from one country to another. Depending on the duration of the trip and the country of operation, different ratings may apply.
A lot of countries provide certain deductions when spending money on meals (breakfast, lunch, dinner), drinks, and 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 for managing per diems.
Setting up per diems
If your company works with per diems, you can define them in the Admin > Under Account Settings, click Advanced Settings > App Settings select Activate per diems (See image below)
You can import a standard per diem list for a specific country and year. See the list of countries below.
To upload a per diem rate, here are the steps.
1. Go to Admin > Under RATES, choose Per Diem > click Select Country.
2. In the pop-up box Select the Country from the drop-down list, the Year, and Branch.
3. Click Import List
NOTE: If you cannot find the list you are looking for, you can create your own. The basic elements we need from you are the applicable timeframe, the regions, and the amounts. Furthermore, you can add deductions and overnight stays if applicable to your company.