TDY per diem has gotten complicated with all the locality rate variations, M&IE breakdown rules, and first-and-last-day reduction requirements flying around. As someone who booked close to the lodging ceiling out of habit for years before actually tracking the differential and realizing what that cost me across multi-week trips, I learned everything about how per diem works and how to manage it correctly. Today I will share it all with you.
How Per Diem Rates Are Determined
Per diem rates are set annually by the General Services Administration for CONUS locations and by the Department of Defense for OCONUS locations. The rate is based on the cost of lodging and meals at the specific TDY location — each city or county has its own rate, and some high-cost areas have higher rates than the standard. The rate that applies is the one for your TDY location, not your home station.
Per diem covers two components: lodging and Meals and Incidental Expenses (M&IE). The lodging component reimburses actual lodging costs up to the lodging ceiling for the location. The M&IE component is a flat daily amount regardless of what you actually spend on meals.
The M&IE Breakdown
M&IE isn’t one flat number — it’s broken down into breakfast, lunch, dinner, and incidentals. This matters when meals are provided by the government or the event. When a meal is provided, you must deduct that meal’s allocated portion from your M&IE for that day. Not doing so is technically a fraudulent claim.
That’s what makes M&IE endearing to travelers who don’t want to track every coffee — the entire M&IE amount is yours without receipts, but you have to account for provided meals correctly.
First and Last Day Rules
On the first and last day of TDY travel, M&IE is reduced to 75% of the full daily rate. This is a federal regulation applied uniformly — it’s not a DTS setting or an option your approver can change. Factor the reduced first and last day amounts into your travel budget.
Maximizing Per Diem Legally
The most straightforward way to come out ahead on TDY: stay somewhere that costs less than the lodging ceiling. If the lodging rate for your TDY location is $140/night and you find a DoD-approved property for $110/night, you keep the $30/night difference. Shopping the government lodging hierarchy first — on-base lodging, then government-rate hotels — often finds rates below the commercial ceiling. I’m apparently someone who booked close to the ceiling out of habit for years before tracking the lodging differential — the difference across a two-week TDY adds up.
When Per Diem Doesn’t Apply
Probably should have led with this, honestly: per diem doesn’t apply when you’re provided government quarters or when the TDY duration triggers a different authority. TDY over 180 days may be treated as an extended TDY with different rate structures. Verify the applicable rate structure before any long-duration TDY rather than assuming standard per diem applies for the full duration.
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