[Aandreew]

Found on the web the meals are not and neither is the lodging. However we require a receipt for lodging to verify the cost was incurred. Our per diem is separate for lodging and meals. If the lodging receipt is for $60.00 and the lodging per diem is $80.00 do we tax the $20.00 extra paid to the employee as income? What if 'overnight or travel status per diem' is $124.00 (combined per diem), same receipt submitted for verification, however 'overnight or travel status per diem' does not distinguish amounts for lodging or meals?

[Booky]

The payment of per diem is an expense to the company. It is not taxable income to the employee, even if he doesn't spend it all. When an employer reports an employee's earning at the end of the year on a W-2, per diem is listed separate from taxable income, under 'Misc. Non-taxable'. If the company doesn't want to pay more than $60 for a room when the per diem is $80, then the company should arrange for the rooms to be paid directly by the company. When you pay per diem, you allow the employee to make the decision of where to stay.

[Aandreew]

The payment of per diem is an expense to the company. It is not taxable income to the employee, even if he doesn't spend it all. When an employer reports an employee's earning at the end of the year on a W-2, per diem is listed separate from taxable income, under 'Misc. non-taxable'. If the company doesn't want to pay more than $60 for a room when the per diem is $80, then the company should arrange for the rooms to be paid directly by the company. When you pay per diem, you allow the employee to make the decision of where to stay.

Thanks. Your answer is consistent with another source.