Business travel has returned to many companies’ schedules in the years since the health pandemic. Meanwhile, stories about flight delays and cancellations continue to remind travelers that getting from one place to another can be an adventure, if not downright challenging.

There is some welcome news on the expense side of business travel. The Internal Revenue Service (IRS) has released updated per diem rates for 2026-2027, giving businesses new standardized amounts to use when reimbursing employees for qualifying travel expenses.

The new rates took effect Oct. 1, 2026, and apply to travel expenses incurred while business owners and employees are away from their tax homes on business. For companies that regularly send employees to conferences, trade shows, client meetings, off-site training, or other business destinations, the update provides an opportunity to review travel reimbursement policies and simplify expense reporting.

What Are Per Diem Rates?

A per diem is a daily allowance used to cover certain expenses while traveling for business. Employers can use IRS-approved substantiation methods to reimburse employees for qualifying lodging costs and meals without requiring receipts for every expense covered by the allowance.

The IRS updates its special per diem rates annually to account for changes in travel costs. Under the applicable rules, businesses can use these rates to determine how much of an employee’s travel allowance is treated as substantiated for federal tax-related purposes.

For employers, a properly administered per diem arrangement can make expense reporting easier. Employees still need to document when and where they traveled, along with the business purpose of each trip, but the standardized allowance can reduce the need to collect individual receipts for expenses covered by the applicable per diem method.

The New Per Diem Rates for 2026-2027

IRS Notice 2026-60 (PDF file) establishes the following special per diem rates for the period beginning Oct. 1, 2026: Continue reading… Continue reading… Continue reading…