The IRS has released the updated per diem rates for taxpayers who travel for business, effective October 1, 2025 through September 30, 2026. These rates apply to travel away from home for ordinary and necessary business purposes and are used to simplify expense reimbursements for lodging, meals, and incidental expenses.

  • High-cost localities: Daily total allowance increased to $327 ($215 lodging, $112 meals/incidental).

  • All other localities: Daily total allowance set at $227 ($145 lodging, $82 meals/incidental).

  • The list of high-cost cities has been updated — some destinations were added and others removed based on average lodging costs.

Employers and self-employed individuals can use these rates instead of keeping detailed receipts for each expense, provided they meet the substantiation requirements (maintain records for the trip, use the correct rate and not use it for personal or luxury travel.

Using the IRS per diem rates helps streamline travel reimbursements and reduce recordkeeping similar to the standard mileage rate for vehicle expenses. These two options are IRS approved shortcuts without itemizing every receipt. However, if your ordinary and necessary expenses are higher than the per diem rate, you might want to use your actual expenses backed by invoices, receipts, proof of payments, etc.

Whether you’re an employee, business owner, or self-employed professional, choosing between the per diem method and actual expense tracking can make a difference in your year-end tax position. If you’re unsure which approach provides the best outcome—or how to apply the new high-cost locality list—the GG CPA Services team can help you evaluate the right strategy for your business travel in the upcoming year.

Link IRS – 2025-2026 Special Per Diem Rates

Link Forbes – IRS Announces 2025-2026 Per Diem Rates For Taxpayers Who Travel For Business