What does per diem mean in a job description?

What does per diem mean in a job description?

In many job descriptions, you may come across the term “per diem.” Per diem is a Latin phrase that translates to “per day” in English. It refers to a daily allowance or payment given to employees to cover their daily expenses related to work. Per diem compensation is commonly used in industries where employees have to travel extensively or work away from their regular workplace. This article aims to explain the meaning of per diem in a job description in detail, how it works, its benefits, and some frequently asked questions related to this topic.

1. What exactly is per diem?

Per diem is an allowance or payment provided to employees for their daily expenses, such as meals, accommodation, and transportation, that they incur while on official travel or working away from their regular workplace. Per diem rates vary based on factors like location, industry, and company policies.

2. Is per diem considered part of an employee’s salary?

Per diem is not typically considered part of an employee’s base salary. Instead, it is an additional amount paid to cover their daily expenses incurred during work-related travel.

3. How is per diem calculated?

Per diem rates are usually calculated based on the location where the employee is working or traveling. The rates take into account the cost of meals, accommodation, and other incidental expenses in that specific location. The Department of Labor sets per diem rates annually for federal employees, while private organizations may have their own internal per diem policies.

4. Are there any legal requirements for providing per diem?

There are no federal legal requirements for employers to provide per diem to their employees. However, some companies, especially those in industries that involve significant travel, choose to offer per diem as a means to compensate employees for their daily expenses.

5. What are the benefits of per diem for employees?

Per diem can provide several benefits to employees, including:

• Financial compensation for daily expenses incurred while working away from the regular workplace
• Reduction in personal out-of-pocket expenses related to meals and accommodation
• Increased motivation and satisfaction, as employees feel their expenses are being covered

6. Are there any tax implications of receiving per diem?

Per diem payments for business-related travel are generally non-taxable for employees. However, there are specific rules and criteria set by tax authorities that need to be followed to qualify for tax-free per diem payments. It is advised to consult a tax professional or refer to IRS guidelines for more accurate information.

7. Can per diem rates vary depending on the location?

Yes, per diem rates can vary depending on the location where the employee is traveling or working. Different cities or regions may have different costs of living, influencing the per diem rates provided to employees in those areas.

8. Do all companies offer per diem?

Not all companies offer per diem to their employees. It largely depends on the industry, specific job roles, and company policies. Companies with employees who frequently travel for work or work away from the regular workplace are more likely to provide per diem as part of their compensation package.

9. Can per diem be negotiated during the hiring process?

Per diem rates are often determined by company policies and industry standards. However, in some cases, per diem rates may be negotiable, especially for high-demand positions or when other aspects of the compensation package are being discussed.

10. Is per diem applicable to everyday commuting expenses?

Per diem is generally not applicable to everyday commuting expenses incurred by employees traveling from their homes to their regular workplace. It is designed to cover expenses during work-related travel or when employees are away from their regular workplace for an extended period.

11. Are per diem rates the same for international travel?

Per diem rates for international travel can differ from rates for domestic travel. International per diem rates take into account factors such as currency exchange rates, cost of living in the destination country, and any specific allowances required for international travel.

12. Can employees pocket the remaining per diem if their expenses are lower than the provided amount?

Generally, any remaining per diem amount after legitimate expenses have been covered should be returned to the employer. Per diem is intended to cover actual expenses, and employees are expected to provide receipts or an account of their expenses to justify the payment received.

13. How can I track per diem expenses?

To track per diem expenses effectively, it is advisable to keep detailed records of all expenses incurred during work-related travel or while being away from the regular workplace. This may include saving receipts for meals, accommodation, and transportation, as well as maintaining a log of dates, locations, and purpose of travel.

14. Can per diem be provided in non-monetary forms?

Per diem can be provided in non-monetary forms such as prepaid debit cards, meal vouchers, or company-provided accommodation. These alternatives ensure that employees’ daily expenses are taken care of without the need for reimbursement or paying out-of-pocket.

15. Does per diem affect an employee’s eligibility for overtime pay?

Per diem is not considered as part of an employee’s base salary, and therefore, it does not directly affect their eligibility for overtime pay. However, the calculation of overtime may be based on the base salary plus any additional compensation, including per diem.

In conclusion, per diem in a job description refers to a daily allowance or payment provided to employees to cover their daily expenses incurred during work-related travel or while working away from their regular workplace. Per diem rates vary based on location, industry, and company policies, and it is essential for employees to understand the specific guidelines and reporting processes related to per diem expenses within their organization.