Business Travel Per Diem Rates Unchanged for 2026
Business taxpayers have special per diem rates in their tax toolkit which can be used to substantiate and deduct ordinary and necessary business expenses for travel away from home in lieu of actual expenses incurred. The IRS recently, in Notice 2025-54, made their annual announcement of the rates that apply starting October 1, 2025. Interestingly, and unusually, the IRS said that the per diem rates for the coming 12 months would remain the same as the previous twelve months.
The special rates are designed and intended to simplify accounting for business travel expenses. Instead of having to track and report actual lodging, meal, and incidental expenses spent on business travel, a business may instead, for tax purposes, treat as substantiated an employee's expenses incurred for employment-related travel in an amount up to or equaling the federal per diem rate for the travel location.
What is known as the "high-low substantiation method" applies a higher rate to designated high-cost localities and a lower rate to all other areas. The annual update includes the per diem rate under the high-low substantiation method for travel within the continental United States (CONUS). The rate for travel to high-cost localities within CONUS will thus remain at $319, while the rate for non-high-cost localities stays at $225.
A separate rate applies to substantiate only meals and incidental expenses. The amount treated as paid for business travel meal expenses remains at $86 for high-cost CONUS locations and $74 for all others.
Also unchanged from the past year is the rate just for incidental expenses, which is $5 per day for travel in and outside CONUS, a rate that has remained constant for many years.
Additionally, the IRS annually revises the list of the localities that are treated as high-cost for the upcoming annual period, i.e., October 1, 2025 to September 30, 2026, and for which the rates are in effect. The specific localities subject to the high-cost rate can be found in Notice 2025-54, which can be searched for and viewed at www.irs.gov.
There are also special rates for taxpayers in the transportation industry (think trucking, etc.), and these are normally revised on an annual basis as well. Just like the above, this year these rates are unchanged at $80 for meals and incidental expenses for travel within CONUS and $86 for outside CONUS, after having risen dramatically a year ago.
This article does not constitute tax advice. Contact a tax professional to understand how this may apply to you.
