How are Per Diem Rates Calculated?

There are three different organizations that set Per Diem rates. The General Service Administration (GSA) sets per diem rates for the Continental United States; The Department of State (DoS) sets rates for foreign territories, and the Defense Travel Management Office (DTMO) sets rates for overseas non-foreign areas such as Alaska, Hawaii, and Puerto Rico.

Most counties in the US receive the Standard Per Diem rate. For 2015, the standard rate for Lodging is $83 and the standard rate for M&IE is $46. There are nearly 2,800 counties that receive the standard per diem rate . The GSA has designated over 400 Non-Standard Areas (NSA) that are frequently traveled to by federal employees. These areas receive a higher per diem rate than the standard.

Both the Standard and the Non-Standard Area Lodging Per Diem rate is determined each year by the GSA. The GSA looks at Average Daily Rates (ADR) data published by the GSA’s travel industry partners. The GSA looks at the Monday thru Thursday price of mid-range hotels over the past 12 months to find a fair lodging rate. If lodging rates are much higher during a certain time of year, the GSA takes this into account by raising the Per Diem rate during those more expensive months. This only applies to Non-Standard Areas. Standard Areas receive one per diem rate for the whole year based on average pricing data from all 2,800+ Standard pricing areas.

If a federal agency believes that a standard per diem area should be reclassified as a Non-Standard Area, the agency may send a request for special review to the GSA.

Meal and Incidentals (M&IE) Per Diem Rate is determined based on the average price of breakfast, lunch, and dinner in the specified area plus a flat $5 for incidentals.

The same techniques of cost averaging are used by the Department of State and the Defense Travel Management Office to determine Lodging and M&IE per diem rates for Outside of the Continental United States (OCONUS). Not all OCONUS regions will have a per diem rate. In these cases, actual expenses may be used to the employee’s agency may establish their own rate.