What Does Per Diem Mean?

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By Fairygodboss

READ MORE: Job search, Business travel, Finance, Part time work, United States General Services Administration

At some point throughout your career or job search, you’ve probably come across the words “per diem.” What does per diem mean? Even though it sounds a bit like “carpe diem” — which you probably know translates to “seize the day” — its meaning isn’t quite as exciting.

What Does Per Diem Mean?

Per diem, a Latin term, literally translates to “per day” or “for each day,” and it’s often used in the context of jobs, internships, and employment. In business, a per diem generally refers to an amount of money you receive or may spend per day from your employer.

We’ll outline some of the common uses for the term “per diem” so you understand how it might be used in different contexts.

Federal Per Diem Rate

The U.S. General Services Administration (GSA) has set federal per diem rates for any official government travel. The federal per diem guidelines may change year to year, but they’re available on the GSA website (where you can search for GSA federal per diem rules in different locations). This is the amount of money you may spend on necessities, such as meals, per day if you are traveling for business.

Companies in the U.S. refer to the GSA’s per diem rate guide to determine per diem rates for various U.S. cities. Since the cost of living and expenses varies considerably from place to place, you can expect to have a larger per diem for some cities than others. For instance, if you’re traveling and need to stay in a hotel in New York City, the per diem allowance for this expense will be much higher than it would be if you were staying in a hotel in Kentucky since a New York hotel will be more expensive.

What Does it Mean to Be a Pay Per Diem Employee?

What does per diem work mean? Per diem work is one way to refer to a career opportunity that’s not being offered as a full-time job. If you’re a per diem employee, that means you’ve signed on to work for a specific set of work hours at a specific level of pay without committing to a long-term, full-time job.

If you’re looking for a job, you may notice employers listing per diem positions that pay by the shift or by the day — particularly within industries where temporary work is common or where work is often needed on short notice or on an as-needed basis. In the field of education, for example, a substitute teacher might be labeled a per diem employee, because this is a position that usually needs to be filled urgently and by the day. Another example is the healthcare industry, where workers are sometimes employed based on the need of the hospital or facility at a given time.

Contractors tend to operate with a per diem arrangement as well; some days their work may be exceptionally difficult, and other days it may feel a bit slower, but regardless, they are paid a fixed amount for a shift of day of work.

Per diem work may be a great option for you if you’re not ready to commit to a long-term, full-time job and if you generally have a flexible schedule that allows you to dictate your own hours on short notice. If you like the idea of working on an as-needed basis, which might be great if you’re looking to make some extra cash, this kind of employment might be a great fit for you. It’s probably not the best choice for you if you’re keen on finding a stable job that offers benefits, paid time off, and lots of room for growth.

Per Diem as It Relates to Allowance or Reimbursement

If you’re a full-time employee, that doesn’t necessarily mean the words “per diem” will never apply to you. In addition to referring to a type of work commitment, the term per diem is also used in reference to employees’ expenses or an allowance they might get.

In some jobs, employees might have a set amount of money they’re allowed to spend per day on meals and other expenses like lodging, particularly when they travel often and incur a cost as a result of their work. If you frequently have lunch meetings with clients, you might also be given an allowance for covering the meal.

Oftentimes employees will be given a reimbursement form so that they can provide details on their travel expenses (if you’re asked to drive somewhere for work, for instance, your company might give you mileage reimbursement or travel reimbursement if you take a cab, train, or even a plane for a work-related function).

Travel

Ever heard of travel expenses or travel per diem — or travel expenses per diem? Your company may have a travel expense reimbursement policy for business travel plans — and employee travel expenses are just what the sound like. Let’s say you’re taking a business trip to another city. Your boss might tell you to save your receipts so that you can later track your work-related travel expenses and submit an expense report for reimbursement on costs like airfare, accommodations, taxis, public transportation, or even meals. You might be asked to fill out a specific travel expense template or a travel expenses form to keep your info organized.

Travel expense reports can be particularly appropriate for certain kinds of jobs. Let’s say you’re a flight attendant and you often have long layovers in a city, or your return flight is postponed until the next day. Maybe you have a meal allowance of $50 per day that you travel, or your employer might tell you your per diem allowance for lodging on a given work trip is $100 per night.

Example:

Lodging allowance: $100/night

Meal allowance: $50/day

Length of trip: 3 days

Details:

Day 1: Hotel, $100; Breakfast: $10; Lunch: $15; Dinner: $23

Day 2: Hotel, $100; Breakfast: $15; Lunch: $110; Dinner: $25

Day 3: Hotel, $100; Breakfast: $7; Lunch: $10; Dinner: $20

Total allowed reimbursement: $750

Toal reimbursement: $734

If you travel for work frequently, the per diem rate or cost-of-living allowance might change depending on what city you’re in, as your expenses for travel per diem in one city might unavoidably be much higher than your rate per diem in another city.

In some occupations where unusually long hours are regularly expected, employees might have a per diem meal allowance or reimbursement capabilities for their travel expense home (if they work late) on any ordinary day.

Again, if you’re in a position where you’re sometimes or regularly offered a per diem allowance, make sure to save your receipts and be diligent about submitting expense reports so that you’ll be reimbursed!

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