What Does Per Diem Mean & Other General Thoughts & Ideas On Allowances

A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual doom.
~ Martin Luther King, Jr.

What does per diem mean? Basically, per diem is Latin for “per day” or “for each day” and it is basically an allowance that a company or employer pays to an employee or worker who is working off site or away from their usual workplace. That’s the per diem definition in a nutshell.

Often you will find per diems offered for workers who are away on business travel or trips that occur on an infrequent basis. So if you are away on a work related course once or twice a year for a week or so at a time then you will be given a per diem rate. If you often or frequently travel away from your regular workplace then usually your overall salary reflects this, so rather than being given a per diem rate you will usually be paid your regular rate which has already taken this aspect of your work into consideration.

Per diem rates are easy ways for companies to allow employees a way to pay for meals and other incidentals incurred during a business trip without the headache of extra paperwork such as expense reports that the employee would normally have to fill out.

The per diem rate differs whether it is an international per diem rate, or per diem rates for the military or conus per diem etc. Your employer will have the current per diem rate for your work environment if you just ask HR.

Oftentimes in the United States many cities and counties use the generally accepted per diem rate that is developed by the GSA or the US General Services Administration.

To give you an idea, the average per diem rate for California for food and lodging is about $125. However that can range from a high of $240 if you are scheduled to be working and staying in the Santa Monica area to a low of $135 for Modesto, CA. That is the amount you are likely to receive per day for travel outside of your normal city workplace. In New York the average per diem rate is also $125, in fact $125 is the average government per diem rate as well as state per diem rates.

In New York the per diem can be as high as about $365 if you’re working in Manhattan and associate boroughs (Manhattan not being your usual workplace) to a low of $140 for Binghamton/Owega.

As you can see, there is a large variety amongst per diem rates and although the GSA per diem rates are standard, your county/city/state may not use them or have their own guides. However, the rates shared with you above will give you a good ballpark figure.

For DOD per diem rates as well as CONUS per diem rates (Continental United States) I refer you to the Department of Defense as there are many variables that go into determining the rates for your specific rank, location and other inputs required.

Another kind of per diem rate if you are eligible is the business mileage reimbursement rate or per diem mileage rate. Obviously, this changes fairly regularly at about at least once a year if not more often. If you are using your own private vehicle then the rate as of 1 January 2011 was $0.51 per mile. The GSA sets these rates and they also have rates for airplanes $1.29 per mile and for motorcycles it is at $0.48 per mile.

Interestingly, the IRS allows for a per diem mileage rate for vehicles at $0.55 per mile.

In my experience I have found these per diem rates to be on the side of generosity. At least they seem to have a buffer included in them. I have never used up all of my per diem and I suggest that you don’t either.

When you are given an allowance that you don’t need to put in an expense report for, I think it behooves you to use that allowance frugally. This is true even if you need to put in an expense report but this is about per diems. Why not eat inexpensively and lightly as with a plant based diet and then save the extra money to buy a gift for loved ones who are likely missing you or even save it for a rainy day.

I keep beating the drum of simplicity, frugality and minimalism as a lifestyle because it gives you so much more freedom and peace in your soul. Be a good steward of what has been given to you and I believe it will pay dividends in the years to come. It is good practice and good discipline.

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