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THE PER DIEM GUIDE

Per diem, in its own column.

Per diem, often called subsistence, covers meals, lodging and the cost of working away from home. It is usually separate from wages. That's exactly why it causes confusion when you compare a paycheck.

An educational guide for U.S. lineworkers. It is not legal, tax, payroll or employment advice, and it does not decide what your agreement or employer owes you. Every dollar figure is a fictional example. Updated ; sources checked .

01 / Three separate questions.

Keep these apart and most per diem confusion goes away:

  1. What does the agreement promise? Who is eligible, which days count, and how much.
  2. How does the paycheck report it? On its own line, inside a total, or on a separate payment.
  3. How is it treated for tax and overtime? That depends on the plan and the facts, not the label.

02 / What the clause decides.

  • Eligibility: distance from home or the yard, overnight stays, or specific assignments.
  • Which days: each day worked, each calendar day away, or only days over a minimum number of hours.
  • Partial days: travel days, the first and last day, and days released early.
  • Provided meals and lodging: whether they reduce or replace the daily amount.
  • The amount: a flat daily figure or receipts, and the date a new rate took effect.

03 / Track per diem by date, not by paycheck.

For every day away, record the date, whether you worked, whether it was a travel day, and whether meals or lodging were provided. At payday, count the eligible days in the pay period and multiply by the daily amount the clause sets for each kind of day. A list of dates is easier to check, and to explain, than a total.

04 / A fictional per diem check.

Illustrative example only. Assume a confirmed rule of $95.00 per day worked away from home, with travel days not counted.

Days worked away in the pay period
9
Expected per diem: 9 × $95.00
$855.00
Per diem line on the fictional paystub: 8 × $95.00
$760.00
Possible difference
$95.00, one day

The next step is to find which date is missing, and whether a rule (an early release, provided lodging, or a cut-off date) explains it. This difference sits outside gross wages, so it should not change your wage comparison.

05 / Per diem on the paystub.

  • Look for a separate earnings or reimbursement code; names vary, such as per diem, subsistence, or travel allowance.
  • Check whether the paystub's "gross" includes it. If it does, subtract it before comparing wages.
  • Check whether it is taxed. That tells you how payroll is treating it, not whether that treatment is right.
  • Some employers pay per diem on a separate check or deposit. Check it separately as well.

See the paystub guide for the full layout.

06 / Where the tax rules live.

The IRS treats travel allowances differently depending on whether the employer's arrangement is an accountable plan. Under IRS Publication 463, an accountable plan requires a business connection, adequate accounting to the employer within a reasonable time, and return of any excess. Under such a plan, an allowance at or below the federal rate generally isn't included in W-2 wages; an excess you don't return is. Payments under a nonaccountable plan are reported as wages.

Whether you are "away from home" for tax purposes depends on where your tax home is, which can be complicated for workers who travel constantly. The federal per diem rates are published by the General Services Administration. They don't set what your employer has to pay. This is general information, not tax advice; ask a tax professional about your situation.

07 / Per diem and overtime.

Federal rules leave reimbursements for expenses incurred for the employer, including living expenses while traveling on the employer's business, out of the regular rate used for overtime, as long as they reasonably approximate the expense. A per diem at or below the federal travel rates is treated as reasonable. A disproportionately large amount can be counted in the regular rate. See 29 CFR 778.217.

How LinePaycheck handles per diem.

Confirm a flat per diem per worked date and LinePaycheck pays it once for each date you log work, even with several shifts in a day. It is kept out of the gross-wage comparison and shown as its own line, so a per diem gap can't masquerade as missing wages. More complex subsistence rules, such as partial travel days or provided lodging, aren't modeled yet; the app tells you per diem hasn't been checked rather than guessing. See every supported rule.

Common questions.

Is lineman per diem taxable?

It depends on how your employer's plan works, not on the name. Under IRS rules for an accountable plan, an allowance at or below the federal per diem rate is generally not included in your W-2 wages, while an excess you don't return is included as wages. Allowances under a nonaccountable plan are reported as wages. See IRS Publication 463 and ask a tax professional about your situation.

Does per diem count toward overtime?

Usually not, if it reasonably approximates the expenses of working away from home. Federal rules leave such reimbursements out of the regular rate, and per diem at or below the federal travel rates is treated as reasonable. An amount that is disproportionately large, or that really pays for hours worked, can be included. Check how your per diem is defined.

Is per diem part of gross pay?

Sometimes it is printed inside a total gross figure and sometimes on its own. For a paycheck check, compare wage gross with wage gross, and compare per diem with its own line. Mixing them can hide a missing wage or create a false difference.

Do I get per diem on travel days and days off?

Only if your agreement or the job's terms say so. Some pay per worked day, some per calendar day away, some pay a partial amount on travel days, and many reduce it when meals or lodging are provided. Read the clause and record which days you were away and why.

What is the difference between per diem and subsistence?

Often nothing but the name; many agreements call the daily travel allowance subsistence. What matters is the clause: who is eligible, which days count, the daily amount, and how provided meals or lodging change it.

Sources.