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reasonable meal per diems? — Business Ready

reasonable meal per diems?

Sales & MarketingDuring tough times companies review their expenses to see where they can cut in order to survive. Not wanting to touch headcount (your biggest operating expense), you typically look to cut travel and marketing (your next two biggest expenses). Both are essential for getting to your customers and creating demand for your product. But who says it has to be cut? Why not spend wiser? Now is a good time to introduce Travel Guidelines so you can better manage and control your travel expenses.

When it comes to writing Travel Guidelines, questions about mileage rate are always popular, but I also get a lot of questions about reasonable daily meal allowances.

What is an acceptable meal per diem?

Best practice in the United States has always been to follow what government civilians are allowed to spend while traveling. For travel within the United States this information is provided by the US General Services Administration Meals & Incidental Expense (”M & IE”) rates. These meal and incidental rates mostly fall between US$45 - $65 per day for various cities (at the time of this writing).

Given the M & IE rates, best practice is US$55 per day for meals when traveling within the United States.

In Canada, the standard is roughly set by the Canada Revenue Agency (”CRA”). I say roughly because the guidance they give is either (1) provide detailed receipts for everything or (2) they will allow you to claim C$17/meal or C$51/day without receipts (at the time of this writing). Since tracking all those receipts for your expense reporting can be costly for a small company, most companies just use the CRA guidance:

Make it a flat C$55 per day for meals when traveling within Canada.

For travel outside North America, the US Department of State provides the best guidance for per diems. For instance, if you look up the Foreign Per Diem Rates by Location, select country ‘France’ and look at the city of Paris, you will note that the M & IE Rate currently is US$178. Then you have to go back to Appendix B (breaks out meals from the rest of the incidentals) and you will see the meal per diem is US$143 for a US$178 M & IE Rate. This per diem includes meal, taxes and tip. Take into consideration foreign exchange and that’s approximately 100 Euros per day.

Hopefully, by introducing a little structure, you can manage costs better when it comes to discretionary travel expenses and get you a wee bit more run rate to survive these tough times.

Don’t feel like writing Travel Guidelines? Business Ready has created a draft template to get you started. Check it out here.

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