Per diem

A fixed daily allowance for an employee's everyday expenses on a trip. Rather than requiring itemised receipts for every meal or incidental cost, the company pays a set daily amount, which may vary by destination cost of living. This simplifies both the traveller's expense claim and the company's expense administration.

Per diem rates are usually set in the travel and expense policy and may differ for domestic and international trips, and for specific countries or cities with higher living costs. In many countries, tax authorities publish reference rates, and allowances paid above these levels may be treated as taxable income. Rules also define how per diems apply to partial days, such as the days of departure and return, and whether the amount is reduced when meals are provided by the hotel or at a conference.

For employees, a per diem is simple and predictable: they know in advance how much they will receive and do not need to keep receipts for every coffee or meal. For the company, it reduces administrative work and makes daily costs easier to budget. The main challenge is setting fair rates that reflect real costs in different destinations and applying them consistently, especially when trips involve several cities.

Tumodo automates the calculation of daily allowances. Companies set rates for domestic and international trips, choose the currency for international travel and add exceptions for specific cities or countries. The rules can apply to all employees, selected departments or individuals, and are applied automatically when a travel expense report is created. The allowance is recalculated as services are added or cancelled, and when a trip involves several cities on the same day, the lower applicable rate is used, so employees do not need to return money to the company.