Per Diem Calculator 2026: What Is Tax-Free, By City

The Ceiling Is Two Numbers, and Both Have a Travel-Day Discount

The federal government publishes a nightly lodging rate and a daily meals-and-incidental rate for every city it sends employees to, and those two numbers have become the de facto tax line for travel nurses, truck drivers, field technicians and anyone else paid a stipend on assignment. For FY2027, which started 1 October 2026, the floor is $113 lodging and $68 meals in any city GSA does not list separately, and the top of the range is $499 a night in Park City, Utah during ski season.

The part almost every page gets wrong is that the meals rate is not $80 times every day of the assignment. Publication 463 pays 75 percent of the M&IE rate on the first and last day of travel, because you did not buy three meals away from home on a day you spent mostly in a car or a plane. On a 13-week, 91-day assignment in Dallas, TX that is:

• 89 full days at $80 = $7,120
• 2 travel days at $60 = $120
• Meals ceiling for the contract: $7,240, which is $40 below the $7,280 you get by multiplying the rate by 91

The two travel days cost you $40 of meals ceiling, which is what the 75 percent rule takes.

Three Pay Structures, Three Different Answers

How you are paid	What the ceiling does	What lands on your W-2
Fixed stipend, no receipts	Caps the exclusion at the GSA number	Everything above the ceiling
Reimbursed actual cost, receipts in	Does not cap it at all	Nothing, if substantiated
1099 contract	Caps your deduction on Schedule C	All of it is income first

The middle row surprises people most. An accountable-plan reimbursement of what you genuinely paid is not limited by the federal rate, so a $350 hotel night that you can prove is fully excludable even in a city whose ceiling is $180. The ceiling is what protects you when nobody asks for proof. The catch is the word accountable: the IRS requires substantial business connection, expense reporting, and a rule that you return anything over the allowable amount. A flat monthly housing allowance folded into your check with no reporting requirement fails that test, and the entire allowance is wages, not just the excess.

Worked Example: A 13-Week Contract in Dallas, TX

Housing at $250 a night for 91 nights plus $75 a day in meals allowance comes to $29,575 over the contract.

• Lodging: 91 nights at $250 against a $184 ceiling is $6,006 over
• Meals: 91 days at $75 against a $7,240 ceiling that already carries the travel-day cut is $415 under
• Add the two halves up and it looks like a $23,984 ceiling against a $29,575 package, which would say $5,591 of wages
• The real answer is $6,006 taxable, about $1,321 of federal tax at a 22 percent bracket before state tax

$415 is what the netting mistake costs, and it is the most common error on per-diem pages: the ceiling is tested on each category on its own, so a modest meals allowance cannot absorb an over-cap housing package. The fix belongs at offer stage rather than in April. Ask the agency to book the housing above $184 as a receipted reimbursement, or to pay the furnished apartment directly, and that $6,006 stays outside the wage line.

What the Ceiling Does Not Cover

• Your tax home. Every one of these rules assumes you have one. Give up your apartment, move your family to the assignment city, or take an indefinite contract, and the whole stipend becomes wages regardless of the ceiling. The three-part test is on our tax home guide.
• Gap weeks. The ceiling follows the days you are away on the clock, not the weeks you are between contracts.
• State tax. Several states follow the federal exclusion and several do not, so the same stipend can be clean federally and taxable in the state you worked in.
• Incidentals. The M&IE number includes them, but a separate incidental allowance has its own $20-a-day federal figure, and most agencies never pay it.

Frequently Asked Questions

Is per diem taxable if my employer does not ask for receipts?

Only the part above the federal ceiling. A fixed daily or monthly amount under the GSA rate stays excluded even with no receipts, which is the practical reason agencies use per diem at all.

Why is my meals money lower on the first and last day?

Publication 463 sets travel days at 75 percent of the M&IE rate for travel inside the United States. If your employer pays a flat daily amount for all 91 days, the extra 25 percent on those two days is the piece that can tip you over the ceiling.

Does the ceiling change mid-year?

Yes, on 1 October. FY2027 rates took effect that day, and a contract that straddles it has two ceilings. Use the rate for the city and the nights that fall in each fiscal year.

Can I deduct more than the ceiling if my hotel really cost more?

As an employee on an accountable plan, yes, with receipts. As a 1099 contractor, no: the substitute-per-diem method caps the deduction at the federal rate, so above-ceiling lodging is your own cost unless you deduct actual expenses with records.

Is the stipend reported anywhere?

A properly excluded per diem appears in box 12 of the W-2 with code L and is not in box 1. If your stipend is nowhere on the W-2 and never was, ask for written confirmation that it is being treated as excluded; that silence is where the surprise at filing time comes from.

Sources

• GSA FY2027 per-diem master file: Every lodging and M&IE rate in the calculator, pulled 27 September 2026, effective 1 October 2026 through 30 September 2027, including the $113 and $68 standard CONUS floor.
• IRS Publication 463, Travel, Gift and Car Expenses: The 75 percent first-and-last-day M&IE rule, the accountable-plan requirements, the $20 incidental figure, and the requirement of a tax home to travel away from.
• IRS Topic 703, General Rules on Meals and Entertainment: The substantiation standard that separates a reimbursed actual expense from a flat allowance.

Next step: Bring the pay statement that splits housing from meals. The exclusion is measured per category, so a single combined line makes the calculation impossible to defend.