What Does Per Diem Cover? Lodging, Meals & Incidentals
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In this guide
The most common mistake new business travellers make with per diem isn't calculating it wrong — it's assuming it covers more, or less, than it actually does. Get the boundaries clear once and you'll never double-claim, or under-claim, again.
TL;DR
Per diem covers exactly two things: lodging (your hotel room, up to a published cap) and M&IE — meals plus a flat $5/day incidentals allowance for tips and small fees. It does not cover transportation, baggage fees, conference registration, or any other trip cost — those are reimbursed separately, on top of per diem, not from within it.
The two buckets, and why the split matters
Per diem is split into two distinct buckets, and knowing exactly what's in each one keeps you from double-claiming an expense that's already baked into your daily rate, or missing a cost you're entitled to claim separately.
Lodging: what's covered
Lodging covers the nightly room rate, up to the GSA cap published for that city and month. It's reimbursed at your actual cost, capped at the published ceiling — not paid as a flat sum regardless of what the room cost. Lodging taxes on CONUS travel are usually reimbursed separately and are not counted against the lodging cap itself, which is a detail that catches out travellers in high-tax cities. If you're booking somewhere with seasonal pricing, check our guide on why GSA lodging rates change by month before you commit to dates.
Meals & incidentals (M&IE): what's covered
- Breakfast, lunch and dinner, at the specific dollar split published in the GSA M&IE table for that rate tier — see our full M&IE breakdown for the exact figures.
- Incidentals — a flat $5 per day for small fees and tips, such as tips to porters, hotel housekeeping staff, or similar service workers.
| Component | Amount |
|---|---|
| Breakfast | $16 |
| Lunch | $19 |
| Dinner | $28 |
| Incidentals | $5 |
| Total M&IE | $68 |
What's inside the FY2026 standard $68 M&IE rate
What per diem does not cover
Transportation — airfare, train fare, rental car, personal vehicle mileage — is reimbursed on top of per diem, not from it. So is baggage fees, conference or event registration, business phone calls, printing, and other genuine out-of-pocket costs tied to the trip. These are actual-cost reimbursements, generally requiring a receipt, and they sit entirely separate from the flat daily per diem figure.
Mileage: a separate calculation entirely
If you drive your own vehicle for business, that mileage is reimbursed at the IRS standard mileage rate — 72.5 cents per mile for the first half of 2026, rising to 76 cents from July 1 — not at any per diem figure. Use our mileage reimbursement calculator to total a trip; it's a genuinely separate calculation from your lodging and M&IE per diem, even though both often appear on the same expense report.
“Per diem covers lodging, meals, and incidental expenses. Incidental expenses means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.”
— U.S. General Services Administration, Federal Travel Regulation glossary, gsa.gov
What happens if a meal is provided for free
If a conference, client or hotel provides a meal at no cost to you, GSA expects you to deduct that specific meal's published value from your M&IE claim for the day. The $5 incidentals portion is never deducted, even when all three meals are provided free. Full detail — including the exact per-meal figures at every rate tier — is in are provided meals deducted from per diem?.
Does per diem cover flights and rental cars?
No. Transportation costs — flights, rental cars, trains, mileage — are reimbursed separately from per diem, generally at actual cost with a receipt or, for personal-vehicle mileage, at the IRS standard mileage rate.
What are 'incidentals' in per diem?
A flat $5-per-day allowance covering small fees and tips — to porters, hotel housekeeping, and similar service staff — included within the M&IE figure.
Does per diem cover parking and tolls?
Typically no — parking and tolls are usually reimbursed separately at actual cost, on top of per diem, though this can vary by employer policy.
Is per diem a fixed payment or a reimbursement up to a cap?
Lodging is reimbursed up to a published cap, based on actual cost. M&IE is a flat daily allowance, paid regardless of what you actually spend on food that day.
Calculate it now
Use the free GSA per diem and IRS mileage calculators.