Can We Reimburse for the Cost of Meals?

by Mammoth Team on January 3, 2017

Reimburse for the cost of meals?

Q: Currently, we pay our technicians $35 per day per diem for meals when they travel to attend training out of town. We have found that they sometimes eat very cheaply to save the money and pocket the difference. Do we have the option to reimburse them for the actual cost of meals using receipts they provide? And what are the limits for breakfast, lunch, and dinner?

A: Yes, you can absolutely reimburse for exact expenses.

A thing or three to think about, though:
  1. The lowest per diem used by the IRS is $11 for breakfast, $12 for lunch, and $23 for dinner. The highest is $17 for breakfast, $18 for lunch, and $34 for dinner. The IRS bases the per diem on the area where the employee is traveling, and when setting your own limits, we recommend you do the same.

  2. If you set a max-per-meal, employees may stop spending frugally and start spending every dime they are allowed.

  3. The result of #2 is that you could end up spending the same amount of money while substantially adding to your paperwork.
This is definitely a cost benefit analysis situation. If you're really bothered by employees pocketing the extra money, by all means go the exact expense route. But realize that given the extra overhead to deal with the receipts and expense reports, it may not be financially worth it.

Want more information? Learn the federal rules for common travel time pay situations.

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Topics: Compliance, Best Practices