# Per Diem Amount for Business Travel: FY2027 Rates

URL: https://elevatedtaxstrategies.com/tax-planning/per-diem-rates-business-travel/
Markdown: https://elevatedtaxstrategies.com/tax-planning/per-diem-rates-business-travel.md
Category: Tax Planning
Published: 2026-11-01
Author: Ramon Liriano Jr.

> Your per diem amount comes from GSA rates for the city you sleep in. See FY2027 rates, the high-low method, a per diem calculator, and self-employed rules.

## TLDR

Your **per diem amount** is a set daily rate for meals and small travel costs (and, for some employees, lodging) on a business trip. The government agency **GSA** sets a rate for each city. For the year that started **October 1, 2026**, the basic rate is **$113 a night for lodging** and **$68 a day for meals**. Many pricier areas have higher rates. Say you are self-employed. You can use the meal rate, but **lodging is always your actual cost**. Most meals are still only **50% deductible**.

You booked the trip. You paid for the hotel, the Uber, and three days of meals. Now tax time comes, and you have a pile of crumpled receipts, or no receipts at all.

That's where **per diem** helps. "Per diem" is Latin for "per day." Instead of adding up every taco and coffee, you use a set daily amount. The government already picked it for that city. The per diem amount still needs proof of the trip, but it can save you from saving every meal receipt.

The catch: the rules change depending on who you are. An employee, a 1099 contractor, and an S-corp owner all use per diem a little differently.

In this guide, you'll learn:

- Find the right **per diem amount** for any city using the GSA rates, including the new FY2027 numbers
- See how the IRS **high-low method** works and who is allowed to use it
- Learn why the self-employed get **meals per diem but not lodging per diem**
- Apply the **50% meals limit** with a worked example that adds up
- Set up per diem the right way as an **S-corp owner** through an accountable plan

> **Note: Scope of this article**
>
> This covers federal tax rules for business travel inside the continental
> U.S. (the lower 48 states and D.C.), using GSA rates and IRS Notice 2026-60
> as of October 2026. Alaska, Hawaii, and foreign travel use different rate
> tables. Texas has no state income tax, so for Texans the federal rules are
> the whole story on income tax.

## Step 1: Know what per diem covers

Per diem has two parts. Keep them apart in your head, because the tax rules treat them differently.

### Lodging

This is the hotel or short-term rental. GSA sets a **maximum nightly lodging rate** for each area. Taxes on the room are not part of the rate.

### Meals and incidental expenses (M&IE)

**M&IE** stands for **meals and incidental expenses**. It is one daily number that covers food plus small extras. IRS Publication 463 says "incidental expenses" means fees and tips to porters, baggage carriers, hotel staff, and staff on ships ([IRS Pub. 463](https://www.irs.gov/pub/irs-pdf/p463.pdf)). It does **not** include:

- Laundry or dry cleaning
- Lodging taxes
- Phone calls
- Rides between your hotel, your work site, and where you eat

Those are separate travel costs you track on their own.

### What per diem is not

- It **replaces** the actual cost of the part it covers. It is not extra on top.
- You still have to prove the **time, place, and business purpose** of the trip.
- It only works for travel **away from home overnight** (or long enough that you need sleep or rest).

## Step 2: Look up the per diem amount for your city

The **General Services Administration (GSA)** sets per diem rates for federal workers. The IRS lets businesses use the same rates. You can look up any city or ZIP code on the [GSA per diem rates page](https://www.gsa.gov/travel/plan-book/per-diem-rates).

### The government's year starts October 1

GSA rates follow the federal **fiscal year**, which runs **October 1 to September 30**. That means a single calendar year has two sets of rates:

- **FY2026:** October 1, 2025 to September 30, 2026
- **FY2027:** October 1, 2026 to September 30, 2027

### The standard rate (most of the country)

Any place GSA doesn't list on its own uses the **standard CONUS rate** (CONUS means the continental U.S.).

- **$113**: FY2027 standard lodging (Per night, from Oct 1, 2026)
- **$68**: FY2027 standard M&IE (Per full day)
- **$51**: First and last day M&IE (75% of $68)
- **$110**: FY2026 standard lodging (Through Sept 30, 2026)

GSA per diem rates, FY2026 and FY2027, checked October 23, 2026. Standard M&IE was $68 in both years.

### Rates for some big cities (FY2027)

Pricier areas get their own rate. M&IE in those areas runs from **$68 to $92** a day, and some lodging rates change by season. Here are a few, pulled from GSA for FY2027:

**Sample GSA per diem rates, FY2027 (Oct 1, 2026 to Sept 30, 2027)**

|  | City | Lodging per night | M&IE per day |
| --- | --- | --- | --- |
| San Antonio, TX (Bexar County) | $149 all year | $74 |
| Houston, TX | $133 all year | $80 |
| Dallas, TX | $184 all year | $80 |
| Austin, TX | $184 all year | $80 |
| Chicago, IL (Cook and Lake) | $148 to $238 by season | $92 |
| Anywhere not listed | $113 | $68 |

Rates change every October, so look up the city again for each new trip. If a trip stops in more than one place in a day, Pub. 463 says to use the rate for the place where you **stop to sleep**.

### First and last day of the trip

You don't get the full meal rate on the day you leave or the day you come home. Pub. 463 lets you claim **3/4 of the M&IE rate** on those days, or use another method you apply the same way every time. At San Antonio's $74 rate, 3/4 is **$55.50**.

## Step 3: Use the high-low method (employers only)

Looking up every city is a lot of work for a company with people on the road. So the IRS offers a shortcut called the **high-low method**. There is one rate for a list of **high-cost places** and one rate for **everywhere else** in the continental U.S.

### The rates from October 1, 2026

IRS **Notice 2026-60** sets the rates for travel on or after October 1, 2026 ([IRS Notice 2026-60](https://www.irs.gov/pub/irs-drop/n-26-60.pdf)):

- **High-cost places:** **$329** a day (up from $319 under Notice 2025-54)
- **All other places:** **$230** a day (up from $225)
- **Meal part of those rates** (used for the 50% limit): **$86** high and **$74** low, the same as last year

High-cost places are areas with a federal per diem rate of **$280 or more**, and many are high-cost only part of the year. For example, the notice lists Chicago as high-cost from April 1 to November 30. No Texas city is on the FY2027 list.

### Who can use high-low

This is the big catch. Under Rev. Proc. 2019-48, the high-low method is for a **payer** (an employer) paying an **employee** ([Rev. Proc. 2019-48, Internal Revenue Bulletin 2019-51](https://www.irs.gov/pub/irs-irbs/irb19-51.pdf)). The rules say:

- **Self-employed people can't** use high-low in place of the meal-only method.
- An employer that picks high-low for a worker must use it for **all** that worker's trips in the continental U.S. for the calendar year.
- It **doesn't apply** when the employer and worker are related, which includes an owner of **more than 10%** of the company. More on that in Step 5.

### The October to December switch

For trips in the **last three months** of the calendar year, the IRS gives you a choice. Keep using the old rates, or switch to the new ones. Pick one and use it the same way for everyone. Pub. 463 also has a rule for the meal rate. If you claim it yourself, you must use the **same fiscal year table** for all travel you report on your return for the year.

## Step 4: Use per diem if you're self-employed

If you file a Schedule C as a sole owner or 1099 contractor, per diem works, but only halfway.

### Meals: yes. Lodging: no.

Pub. 463 says you can use the standard meal allowance whether you are an employee or **self-employed**. But it also says there is **no standard lodging amount**. Your lodging deduction is your **actual cost**. So:

- **Meals:** you can use the GSA M&IE rate for the city instead of meal receipts.
- **Lodging:** keep the hotel receipt and deduct what you actually paid.
- **Getting there:** airfare, rental car, or mileage is separate. Say you drive your own car. The business mileage rate for July through December 2026 is **$0.76 a mile**. Good [mileage records](https://elevatedtaxstrategies.com/operating-a-business/business-mileage-substantiation/) still matter.

### The 50% meals limit

Under **26 U.S.C. § 274(n)**, you can generally deduct only **50%** of business meal costs, and that includes the M&IE rate. Pub. 463 says the 50% limit applies even to meals on a business trip when you aren't reimbursed. For more on which meals count, see our guide to the [business meals deduction](https://elevatedtaxstrategies.com/operating-a-business/business-meals-entertainment-deduction/).

### A worked example (San Antonio)

This is a made-up person, not a client. A 1099 contractor from Houston drives to San Antonio for a job. She leaves Tuesday, November 10, 2026 and comes home Thursday, November 12. That is **3 travel days and 2 nights**. The FY2027 San Antonio M&IE rate is **$74**.

- Tuesday (leave day, 3/4 rate): **$55.50**
- Wednesday (full day): **$74.00**
- Thursday (return day, 3/4 rate): **$55.50**
- Total M&IE: $55.50 + $74.00 + $55.50 = **$185.00**
- Deductible at 50%: $185.00 times 0.50 = **$92.50**

Her hotel cost **$128 a night** with tax, so lodging is 2 times $128 = **$256**, deducted in full at actual cost. GSA's $149 lodging rate doesn't matter for her.

Her travel deduction for meals and lodging: $92.50 + $256.00 = **$348.50**, plus her mileage.

### Per diem and mileage reimbursement calculator (by hand)

You can run your own per diem calculator in three steps. Count the full days and the travel days. Multiply by the city's M&IE rate (full rate for full days, 3/4 for the day you leave and the day you return). Then apply the 50% limit, if you are deducting it yourself. For mileage, multiply business miles by the IRS rate for the half of the year you drove.

Here is her trip again with mileage added. Houston to San Antonio is a made-up **200 miles each way**, so **400 business miles** in November 2026:

| Item | Math | Amount |
| --- | --- | --- |
| M&IE, 2 travel days | 2 × $55.50 | $111.00 |
| M&IE, 1 full day | 1 × $74.00 | $74.00 |
| M&IE total | $111.00 + $74.00 | $185.00 |
| Meals deduction at 50% | $185.00 × 0.50 | **$92.50** |
| Lodging at actual cost | 2 × $128 | **$256.00** |
| Mileage, July to Dec. 2026 rate | 400 × $0.76 | **$304.00** |

Total deduction for the trip: $92.50 + $256.00 + $304.00 = **$652.50**. The mileage line is not cut to 50%. Only meals are. If she had driven the same trip in the first half of 2026, the rate would have been $0.725 a mile.

### The incidental-only rate

If you didn't buy any meals that day (say the client fed you), Pub. 463 and Notice 2026-60 allow **$5 a day** for incidental expenses only. Pub. 463 says this rate is not subject to the 50% limit. You can't use it on a day you use the meal rate.

### Truck drivers and other transportation workers

Say your work directly involves moving people or goods by airplane, barge, bus, ship, train, or truck. Say you also regularly travel to places with different rates. Then you can use a **special flat M&IE rate**. Notice 2026-60 sets it at **$80 a day** in the continental U.S. and **$86** outside it, the same as last year. If you use it for one trip, Pub. 463 says you must use it for **all** your trips that year.

Pub. 463 also covers workers under the Department of Transportation **"hours of service" limits**, like many long-haul drivers. They can deduct **80%** of meal costs instead of 50%.

## Step 5: Use per diem as an S-corp owner

S-corp owners are employees of their own company. That sounds like it would unlock the employer rules. It mostly doesn't.

### The 10% owner rule

Rev. Proc. 2019-48 says the lodging per diem and the high-low method **don't apply** when the payer and the worker are related. It sets the ownership line at **10%**. Most S-corp owners own far more than that.

Our reading, confirm before relying on it: as an owner of more than 10%, your S corp should reimburse your **lodging at actual cost**, with receipts. It can still pay you a **meals-only (M&IE) per diem** at the GSA rate for the city. That's because the related-party rule names only the lodging and high-low methods.

### Run it through an accountable plan

To keep the money **tax-free** to you, the S corp should pay travel costs under a written **accountable plan**. That means:

- A **business reason** for the trip
- **Records** of time, place, and purpose (and receipts for lodging) turned in within a reasonable time
- Any **extra advance paid back**

Our guide to the [S-corp accountable plan](https://elevatedtaxstrategies.com/tax-planning/s-corp-accountable-plan/) explains why that matters, and the [accountable plan setup walkthrough](https://elevatedtaxstrategies.com/tax-planning/s-corp-accountable-plan-reimbursement-setup/) shows the monthly steps.

### Who gets the deduction

When the S corp reimburses you under the plan, **the S corp** takes the deduction, not you. The meal part is still held to **50%** at the company level. The reimbursement doesn't show up as wages on your W-2.

If the company pays you a flat travel amount with no records and no payback rule, that money is treated like **wages**. It gets taxed and runs through payroll.

> **Tip: How Elevated can help**
>
> Per diem only saves time if the trips are logged and coded the same way every
> month. Elevated's [bookkeeping](https://elevatedtaxstrategies.com/services/bookkeeping/) keeps travel, meals,
> and reimbursements in the right accounts, and our
> [tax planning](https://elevatedtaxstrategies.com/services/tax-planning-advisory/) can help you set up an
> accountable plan that fits how you travel.

## Step 6: Keep the records that make per diem work

Per diem saves you from proving the **amount** you spent on meals. It doesn't save you from proving the **trip**.

### What to keep for each trip

- **Dates** you left and came home
- **Where** you went (the city where you slept each night)
- **Why** you went (client, job site, conference)
- **Lodging receipts** (always for the self-employed and for owners over 10%)
- **Transportation receipts** or a mileage log

### Simple habits that help

- Write the business purpose in your calendar the day you book, and save the GSA rate page with each trip.
- Use one business card for all travel. If your money is still mixed, start with [separating business and personal finances](https://elevatedtaxstrategies.com/bookkeeping/separating-business-and-personal-finances/).

### Mixed business and personal trips

If you add vacation days, only the **business days** count. Pub. 463 says a trip that is mainly personal makes the travel cost to get there non-deductible. That holds even if you do some work while you're there.

## Common questions

### What is the per diem amount for 2026?

It depends on the city and the date. For trips from October 1, 2026, the standard GSA rate is $113 a night for lodging and $68 a day for meals. Before that, through September 30, 2026, standard lodging was $110 and meals were $68. Pricier cities have higher rates.

### What are the Chicago per diem rates?

For FY2027, GSA lists Chicago (Cook and Lake counties) at $92 a day for meals. Lodging ranges from $148 a night in winter to $238 in spring. Check the GSA site for the exact month of your trip.

### What is the San Antonio per diem rate?

For FY2027 (October 1, 2026 to September 30, 2027), GSA lists San Antonio (Bexar County) at $149 a night for lodging. Meals run $74 a day. For FY2026 it was $137 a night most months, $161 in February and March. The meal rate was the same $74.

### Can I use per diem if I'm self-employed?

Yes, for meals and incidental expenses. No, for lodging. You deduct your actual hotel cost. The meal per diem is still held to the 50% limit.

### Do I need receipts if I use per diem?

You don't need meal receipts when you use the M&IE rate. You still need records of the dates, places, and business purpose. Keep lodging receipts unless an unrelated employer pays you a lodging per diem.

### Is per diem taxable income?

From an employer, it is generally not taxable when it is paid under an accountable plan and stays within the federal rate. Amounts above the rate that you don't pay back, or allowances with no records, are treated as wages.

### How do I calculate per diem for a trip?

Count the days. Use the full M&IE rate for each full day and 3/4 of it for the day you leave and the day you return. Add them up, then take 50% if you are deducting meals yourself. The calculator table above shows a 3-day San Antonio trip worked line by line.

### How do I calculate mileage reimbursement?

Multiply your business miles by the IRS business rate for when you drove. For 2026 that is $0.725 a mile for January through June and $0.76 a mile for July through December. So 400 miles in November 2026 comes to $304. Keep a mileage log with the date, miles, and business purpose of each trip.

### Can my S corp pay me the high-low rate?

Generally no, if you own more than 10%. Rev. Proc. 2019-48 says the high-low method doesn't apply to related parties at that line. Our reading is that the S corp can reimburse your actual lodging and pay a meals-only per diem.

## Ready to talk through your situation?

Say you travel for work and aren't sure whether per diem, receipts, or an accountable plan makes the most sense. Let's look at it together. Book a [Tax Discovery](https://elevatedtaxstrategies.com/discovery/) call on Google Meet. No pitch, and free advice either way.