IRS Sets 2026-2027 Business Travel Per Diem Rates

Small businesses reimbursing employees for travel will have new federal per diem amounts for the tax year running from Oct. 1, 2026, through Sept. 30, 2027. The IRS set the high-low method at $329 for high-cost destinations and $230 for other continental U.S. locations. Those figures rise by $10 and $5 from the prior year.

The amounts can support deductions for lodging, meals and incidental costs when employees travel away from home, but using a per diem approach is optional. Businesses may instead document actual eligible expenses with adequate records or other supporting evidence. Notice 2026-60, issued Sept. 24, also identifies localities qualifying as high-cost, including places with a federal rate of $280 or more.

Workers in the transportation industry have separate meal-and-incidental allowances: $80 for travel within the continental United States and $86 outside CONUS. That group includes employees and self-employed people whose work regularly involves moving people or goods by air, barge, bus, ship, train or truck while traveling away from home. The incidental-only amount stays at $5 per day, covering small costs such as tips for porters, baggage carriers, hotel staff and ship crews.