How Is a Per Diem Figured on a Pay Stub?

Per diem is a Latin word meaning “per day”. It is used to refer to the payment of daily expenses incurred by an employee during the course of their work. Paying a per diem is typically a way employers reimburse employees or agents of the company for travel and other expenses while on duty.


Per diem is a payment made for expenses such as travel, lodging and food. Employers typically pay traveling employees a set amount of per diem per each day they travel for work purposes. This amount is intended to cover expenses incurred from work travel. Companies assess average costs, sometimes city by city, for business-related travel and establish per diem rates accordingly.


Per diem is not a taxable amount. Some employers write a separate check for per diem expenses to employees. Other employers include the amount on the employee’s regular paycheck. The amount is listed on the paystub as per diem. It is calculated by multiplying the per diem amount by the number of days for which the employee earned it.


Employees receiving a per diem amount included on their paystub see all normal items listed including income and deductions. The per diem is calculated, listed on the paystub and employees receive a paycheck that includes their earnings as well as their per diem payment.