Per Diem vs. Mileage Reimbursement: What's the Difference?

Per diem and mileage reimbursement pay for different things

People often assume these are competing options, as if you must pick one. They aren't. Per diem pays for staying somewhere: your hotel room, breakfast, lunch, dinner, and small incidentals like tips. Mileage reimbursement pays for getting there: the fuel, wear, and running cost of driving your own vehicle instead of flying or renting a car. One is a lodging-and-food allowance. The other is a vehicle-cost allowance. Because they sit in separate cost categories, a single business trip can legitimately trigger both.

What is per diem?

Per diem is a flat daily allowance that reimburses lodging and meals/incidental expenses (M&IE) without requiring itemised receipts for every coffee or sandwich. The rate is set by destination, using the GSA per diem rates, which cover federal travel within the continental United States (CONUS). For FY2026, the standard CONUS rate is $110 a night for lodging and $68 a day for meals and incidentals. Higher-cost cities and counties, plus travel outside the continental US, use different rates — see our guide on OCONUS vs CONUS per diem for how that split works. You can read a fuller explainer in what is per diem, or run your own numbers with the per diem calculator.

What is mileage reimbursement?

Mileage reimbursement pays employees for using their own vehicle on business trips. Instead of tracking fuel, oil changes, insurance, and depreciation separately, the IRS sets a standard mileage rate each year that bundles all running costs into one per-mile figure. For 2026, the business rate opened at 72.5 cents per mile and rose to 76 cents per mile from 1 July after a mid-year adjustment. Multiply the miles driven for business by the rate in effect on the travel date, and that's the reimbursement, regardless of what the car actually cost to run. Full detail is in our 2026 IRS standard mileage rate post, and you can calculate a trip with the mileage reimbursement calculator.

Can I claim per diem and mileage reimbursement on the same trip?

Yes. This is the point most people get wrong. Because per diem covers staying and eating, and mileage covers driving, there's no overlap and no double-counting. If you drive your own car to a conference, stay one night, and eat your meals there, you claim mileage for the road trip and per diem for the hotel and food. Both apply because both costs genuinely happened. The only thing to avoid is claiming the same cost twice under two different labels, such as expensing petrol receipts separately on top of the mileage rate, since the mileage rate already includes fuel.

Worked example: driving to a one-night conference

Say an employee drives their own car 180 miles round trip to a conference, stays one night in a standard-rate CONUS location, and eats meals there. Here's how the two allowances stack, in real numbers, using the current mileage rate (76¢/mile, effective 1 July 2026).

That $314.80 is the full, legitimate reimbursement for one overnight trip: driving costs and staying costs, added together rather than chosen between. Neither figure reduces the other. (The same trip taken before 1 July 2026 uses the earlier 72.5¢ mileage rate instead — $130.50 mileage, $308.50 total.)

“We establish the per diem rates that federal agencies use to reimburse their employees for lodging and meals and incidental expenses incurred while on official travel within the continental United States.”

— U.S. General Services Administration, gsa.gov

When does each one apply?

• Use per diem whenever an employee is away overnight and needs lodging, or is on a day trip long enough to cover a meal under agency policy.
• Use mileage reimbursement whenever an employee drives their own vehicle for business, whether or not the trip includes an overnight stay.
• Use both when a trip involves driving your own car AND staying overnight, such as driving to a conference, client site, or training course.
• Neither applies to costs already covered another way, such as a company car (no mileage claim) or a hotel booked and paid directly by the employer (no lodging per diem).

For the wider set of rules around receipts, timing, and what counts as a reimbursable trip, see our travel expense reimbursement guide.