Federal Standard Per Diem Rates for FY 2015 Released

Author: Rena Pirsos, XpertHR Legal Editor

Date: September 12, 2014

The General Services Administration (GSA) has released its annually updated list of federal maximum per diem rates that employers may use to reimburse expenses incurred by employees who travel on business to locations within the Continental United States (CONUS). The rates are effective for travel undertaken on or after October 1, 2014.

Instead of paying or reimbursing employees for their actual lodging, meal and incidental expenses, employers may pay employees a per diem allowance - a flat amount for every day they travel on business. Per diems include separate components for hotels (lodging) and for meals and incidental expenses (M&IE).

Employers may substantiate allowable expenses using the GSA per diem rates for travel to CONUS locations, so long as employees substantiate the time, place and business purpose of the expense.

Per diem allowances that are equal to or less than the federal rates for the locality of travel are excluded from an employee's taxable income, while 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.

Most Rates Unchanged

For fiscal year 2015, most of the rates are unchanged from 2014. The standard CONUS lodging rate remains $83. The six M&IE rates are also unchanged: $46, $51, $56, $61, $66 and $71.

For all locations within CONUS not shown on the list, the lodging per diem rate is $83 and the M&IE rate is $46. The combined maximum standard per diem rate is $129. The combined rates for the listed locations range from a low of $129 (off-season) for several locations to a high of $405 (peak season) for Telluride, Colorado.

New Areas

The following two new non-standard areas have been added to the list:

  • Kayenta, Arizona, with a lodging rate of $109 and an M&IE rate of $61; and
  • San Angelo, Texas, including seasonal periods:
    • For the period June 1 - March 31, the lodging rate is $147 and the M&IE rate is $51.
    • For the period April 1 - May 31, the lodging rate is $126 and the M&IE rate is $51.

Modified Areas

Certain existing non-standard areas on the list have been modified as follows:

  • The entry for Sun Valley/Ketchum, Idaho now includes Hendry County;
  • The entry for Manhattan, New York has been renamed New York City (the GSA no longer sets rates for individual New York City boroughs); and
  • The entries for Burlington/St. Albans and Middlebury, Vermont have been merged into a single non-standard area, including the following seasonal periods:
    • For the periods October 1 - 31 and May 1 - September 30, the lodging rate is $125 and the M&IE rate is $66.
    • For the period November 1 - April 30, the lodging rate is $104 and the M&IE rate is $66.

Deleted Areas

The following five locations, which were non-standard areas in fiscal year 2014, have been moved into the standard CONUS rate category for 2015:

  • Glenwood Springs/Grand Junction, Colorado;
  • Lakeville, Connecticut;
  • Chesapeake/Suffolk, Virginia;
  • Lake Geneva, Wisconsin; and
  • Sheridan, Wyoming.

Other Per Diem Rates

Note that the Internal Revenue Service also provides [Article:11635 a simplified "high-low" method] employers may choose to use instead of the GSA per diem rates, which designates, in a list, various localities as "high-cost" and others as "low-cost," as well as 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 2015.

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 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.