Per diem (from the Latin "by day") is a daily allowance for travel expenses. The U.S. per diem rate includes two components: for lodging, and for meals and incidentals. The IRS says per diem is the highest allowable rate paid by the U.S. government to federal employees who are traveling away from home.
In the U.S. the General Services Administration (GSA) sets the per diem rate for each U.S. city and state and for foreign travel.
The Department of Defense and other federal agencies use the GSA per diem rate table, which is updated periodically, usually annually.
The per diem rates are important for employers to follow, because reimbursements to employees in excess of the allowable per diem rates are taxable to employees as income. Employers must have an accountable plan for employee reimbursement expenses in order to comply with IRS regulations regarding per diem expenses.
GSA Per Diem Rate Table(CONUS refers to the continental U.S.; OCONUS refers to outside the continental U.S.)
Learn more about Per Diem Rates in IRS Publication 1542.