Per diem
is a fixed daily allowance covering meals and incidentals on business travel, replacing itemised expense claims. Many countries publish tax-free per diem scales by destination; amounts above the scale, or paid without a genuine trip, become taxable salary.
Making per diems tax-clean
- Use official scales: Germany, Switzerland and others publish destination-based rates; within them, per diems are tax-free.
- Document the trip: dates, destination, purpose — the allowance’s tax treatment stands on travel evidence.
- Reduce for provided meals: most systems cut the rate when hotels or hosts provide breakfast or lunch.
- Do not disguise salary: recurring per diems for ordinary workdays are taxable pay and a known audit target — notably for posted and assigned workers.
FAQ
Are per diems part of minimum or CBA wage compliance?
Generally no — genuine expense allowances do not count toward wage floors, and posted-worker rules explicitly separate reimbursements from pay. Mislabelling wage as per diem to hit net targets fails both tax and posting audits; the components must be honest.
What happens above the official rate?
The excess is usually taxable employment income unless documented actual costs justify it. Paying hotel bills directly plus a meals-scale per diem is the clean pattern; large flat allowances above scale invite reclassification.