DEFINITION of 'Per Diem Payments'
Generally, a specified amount that employers will pay to employees as reimbursement for various expenses. Per diem payments usually assume a set dollar limit, such as $30 per day for meals or $100 per day for lodging. These payments are usually made for employee travel expenses.
BREAKING DOWN 'Per Diem Payments'
Per diem payments are usually counted as nontaxable income to employees, up to a certain amount, and any excess reimbursement is included in box 12 of the W-2 form. The IRS allows a preset amount to be excluded from taxation for each type of per diem expense.