If you run a construction company, you already know the pain:🚧 Crews on the road🏨 Hotels, meals, incidentals🧾 Lost receipts and messy expense reports

There’s an IRS-approved shortcut that simplifies all of this: per diem.

What per diem does:Instead of tracking every meal and hotel receipt, the IRS allows employers to reimburse traveling employees using fixed daily rates.

When done right:• Tax-free to employees• Deductible to the business• Way less paperwork

FY 2026 Per Diem Rates (unchanged from FY 2025):• High-cost areas: $319/day• Low-cost areas: $225/day(lodging + meals & incidentals combined)

Confirm the location → apply the correct rate → reimburse.Clean. Simple. Defensible.

Important warning 🚨Per diem is an employer tool.Self-employed contractors (sole props, single-member LLCs, partners) generally cannot use the combined per diem rates for themselves.

Common mistakes I see:• Paying per diem without overnight travel• Using the wrong city’s rate• Mixing per diem and receipts incorrectly• No written accountable plan

TLDR:

Per diem is legal, IRS-approved, and massively underused in construction, but only if it’s set up correctly.