Per Diem vs. Actual Expense Reimbursement

Companies reimburse travel one of two ways: a flat per diem, or actual expenses backed by receipts. Each has trade-offs.

Per diem

• Minimal paperwork — no receipts for meals.
• Predictable budgeting and fast approvals.
• Travellers keep any savings if they spend less than the allowance.

Actual expense

• Pays exactly what was spent — better for unusually high-cost trips.
• Requires receipts and line-by-line review.
• No windfall and no shortfall for the traveller.

Which to choose

Per diem usually wins for routine domestic travel because it's cheaper to administer and keeps reimbursements inside the tax-free federal limit. Many organisations use per diem for M&IE and actuals for lodging, which is a common GSA-aligned hybrid.