When you apply for some jobs, you sometimes hear the term “per diem.” Many people don’t know what that actually means or what it entails. Per diem is a Latin term for “per day” and is widely used by employers to establish a base pay for an employee.
In the business world, per diem means “the daily rates employees use for expenses incurred while traveling on business-related activities,” according to US Legal. The per diem allowance given to the employee typically covers expenses such as lodging and meals that deal with why the employee is on the trip for that company.
Different per diem rates are set up for different areas, including domestic travel, international travel, lodging, rental cars and meals. According to US Legal, companies that don’t set their own per diem rates typically use federal rates. There are even set rates for meals.
Some companies even include extras or perks in their per diem rates and allowances, such as airline club membership dues, country club dues, personal reading materials, mini-bar refreshments, movies, pet boarding and personal car maintenance.