Federal Standard Per Diem Rates Increase for Fiscal Year 2017
Author: Rena Pirsos, XpertHR Legal Editor
August 23, 2016
The General Services Administration (GSA) has announced the per diem rates that apply to the lower 48 Continental United States (CONUS) for the federal government's fiscal year 2017, which begins October 1, 2016.
Per diem rates are flat, daily dollar amounts, which are divided into lodging, meal, and incidental expenses (M&IE). They represent the maximum amount that federal employees may receive in travel reimbursements when they travel on official business. Per diem allowances, however, are not limited to federal government employers. Any employer may use these rates to reimburse an employee who travels away from home overnight, in lieu of reimbursing his or her actual expenses.
For a private employer, per diem allowances that are equal to or less than the GSA's rates for the locality of travel are excluded from an employee's taxable income. In addition, an employee who receives a per diem allowance does not need to submit substantiation for the expenses covered by the allowance. The employee, however, must continue to substantiate the time, place and business purpose of his or her travel. Per diem allowances that exceed the federal rates are treated as taxable wages subject to employment taxes to the extent of the difference between the allowance and the federal rate.
Based on the GSA's calculations, the standard lodging amount will increase to $91 a night, from $89 for fiscal year 2017.
Most of the CONUS locations are covered by the standard per diem rate of $142 (a combination of $91 for lodging and $51 for meals and incidental expenses). This represents a very small increase - $2 - from the fiscal year 2016 rates of $89 and $51, respectively. In fiscal year 2017, there are about 350 Non-Standard Areas (NSAs) that have per diem rates that are higher than the standard CONUS rate.
For all locations within CONUS not shown on the GSA's list, the lodging per diem rate is $91 and the M&IE rate is $51. The combined maximum standard per diem rate is $142. The combined rates for the listed locations range from a low of $142 (off-season) for several locations, to a high of $412 (peak season) for Aspen, Colorado.
The GSA now has a mobile app that employers and employees can use to look up per diem rates.
The GSA announced that there are no new NSA areas for fiscal year 2017.
In fiscal year 2017, three locations that were NSAs last year will move into the standard CONUS rate category, to which the standard CONUS rates will apply. The three localities include:
- Lexington Park/Leonardtown/Lusby, Maryland;
- New Bern, North Carolina; and
- Minot, North Dakota.
Other Per Diem Rates
The IRS also provides a list of "high-cost" and "low-cost" localities, which an employer may use in lieu of the GSA's per diem rates. The IRS's rates include special M&IE rates for the transportation industry and a rate for the incidental-expenses-only deduction. These rates have not yet been released for fiscal year 2017.
The Department of Defense updates the per diem lodging and M&IE rates for travel in non-foreign areas outside the continental US (OCONUS), including Alaska, Hawaii, Puerto Rico and the US territories. Revisions to these rates are made in Civilian Bulletins throughout the year and are also announced in the Federal Register.
The Department of State updates the per diem lodging and M&IE rates for travel in foreign areas. These rates are not announced in the Federal Register. They are published on the agency's website.