Community,
We have been working through per diem payments for several years and have tried multiple approaches to remain compliant with an accountable plan.
We have tried paying for hotels directly and providing ME&I, as well as paying a lump sum that aligns with GSA rates while requiring lodging receipts so the payments can remain non-taxable.
Our biggest challenge is that just under half of our employees do not turn in receipts. When that happens, we currently issue a 1099 at year end. This obviously makes the payment taxable to the employee, but it also increases our payroll exposure and results in additional GL and WC premiums.
We have considered not paying per diem unless a lodging receipt is submitted. However, our current process pays per diem on Friday for travel that occurred the previous Friday through Thursday. Requiring receipts before payment would likely mean paying the following Friday, which would force employees to cover expenses for two weeks before receiving any per diem. Many of our employees are not able to do that.
If anyone has successfully navigated this issue, we would appreciate hearing how you structured it. If you are willing to share policies or processes that have worked for your company, that would be extremely helpful.
Thank you in advance for any guidance you can provide.
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Shawn Harris
Business Manager / Owner
CD&H, Inc.
El Dorado KS
(316) 320-7187
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