Per Diem for Government Contractors
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In this guide
Win a federal contract that lets you bill travel, and you inherit a rulebook you didn't write. It isn't your own travel policy that decides what's reimbursable — it's a specific clause buried in the Federal Acquisition Regulation, and auditors check travel vouchers against it precisely because it's designed to be checked.
TL;DR
Federal contractors billing travel on a government contract are capped at GSA per diem rates (or JTR/DSSR rates outside CONUS) under FAR 31.205-46. Bill above that ceiling without written justification and advance contracting-officer approval, and the excess is simply unallowable — not a grey area, a hard rule auditors are trained to catch.
Why the GSA rate becomes the contractor's ceiling too
The Federal Travel Regulation (FTR) and Joint Travel Regulations (JTR) set per diem for federal civilian employees and military/DoD personnel respectively — see our full FTR explainer for how that framework works. Contractors don't fall directly under either regulation as employees do. Instead, the Federal Acquisition Regulation (FAR) ties contractor travel reimbursement to those same limits by reference: FAR 31.205-46 states that lodging, meals and incidental expenses are only reasonable and allowable costs if they don't exceed, on a daily basis, the maximum per diem rates in effect at the time of travel. Bill above them, and the excess is unallowable — a cost the government simply won't pay, and one your own company absorbs.
What 'unallowable' actually means for your invoice
An unallowable cost isn't a paperwork inconvenience — it's a cost the contracting officer is required to reject, and one that can trigger a broader audit of your firm's travel billing practices if it happens repeatedly. Contracting officers reject travel claims that exceed the federal limit or lack documentation as a matter of routine, not as an exception. Firms that consistently bill within the GSA ceiling rarely have problems; firms that treat the ceiling as a soft suggestion tend to find out the hard way at audit time.
| Scenario | Allowable under FAR 31.205-46? |
|---|---|
| Billed at or below the GSA/JTR/DSSR rate for the destination and date | Yes |
| Billed above the rate, with advance written justification and CO approval | Yes, within the approved exception |
| Billed above the rate, no advance approval on file | No — unallowable |
| No documentation of dates, destination or business purpose | No — unallowable regardless of amount |
Contractor travel cost allowability at a glance
Document every trip properly
- Destination city and exact dates of travel.
- Business purpose tied specifically to the contract being billed.
- Lodging at or below the applicable cap, with the 75% rule correctly applied to M&IE on travel days — see our 75% first-and-last-day rule guide.
- Any deviation above the standard cap backed by written justification and, where the situation calls for it, advance contracting officer approval.
“Costs incurred for lodging, meals, and incidental expenses shall be considered to be reasonable and allowable only to the extent that they do not exceed on a daily basis the maximum per diem rates in effect at the time of travel.”
— Federal Acquisition Regulation 31.205-46, acquisition.gov
Outside CONUS: a different rate table applies
Travel to Alaska, Hawaii, US territories or abroad falls outside the GSA CONUS table entirely, and FAR 31.205-46 points instead to JTR figures for those areas and DSSR figures for foreign posts. See our guide to OCONUS vs CONUS per diem for exactly which rate table governs which destination, since applying the wrong table is a common contractor billing error.
Build a defensible figure before you travel
Our per diem calculator produces an itemised, GSA-rate per diem total you can attach to a travel voucher — the kind of clean, rate-defensible breakdown a contracting officer expects to see, with the 75% rule and any seasonal lodging adjustment already applied correctly.
Can a government contractor bill above the GSA per diem rate?
Only with advance written justification and, typically, contracting officer approval for the specific circumstance. Without that approval on file, amounts above the rate are unallowable.
Does FAR 31.205-46 apply to subcontractors too?
Generally yes — the same cost-allowability principles flow down through prime contracts to subcontracts that bill travel, though the specific contract terms should always be checked.
What happens if unallowable travel costs are found in an audit?
The unallowable amount is typically disallowed and must be repaid or credited, and repeated findings can trigger closer scrutiny of a contractor's broader billing practices.
Do contractors use the FTR directly, or a different rulebook?
Contractors aren't directly bound by the FTR itself, but the Federal Acquisition Regulation ties allowable contractor travel costs to the same GSA (and JTR/DSSR) rate tables the FTR produces.
Calculate it now
Use the free GSA per diem and IRS mileage calculators.