IRS Will Increase Business Travel Per Diem Rates

Updated federal rates for lodging, meals, and incidental expenses take effect on October 1.

Updated on Sept. 24, 2026 in Taxes

Bold flat-color editorial illustration featuring a geometric suitcase and coat hanger, symbolizing updated federal business travel policy. — The IRS updated its per diem rates for business travel, providing new benchmarks for lodging and meals effective October 1, 2026. AI Illustration. Upload story photo >

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Will using standard per diem rates simplify your business travel expense documentation this coming year?

The IRS published Notice 2026-60 on September 24, 2026, outlining updated per diem rates for business travel. These new figures will apply to travel expenses incurred from October 1, 2026, through September 30, 2027.

Why it matters

These rates provide a simplified way for taxpayers to substantiate business travel costs without keeping records of every actual expense. The updated guidance ensures that federal reimbursement benchmarks keep pace with current travel costs.

The high-cost per diem rate is set at $329, while the low-cost rate is $230. High-cost locations are defined as those with federal per diem rates of $280 or more.

The players

Internal Revenue Service

The Internal Revenue Service is the federal agency responsible for collecting taxes and enforcing the tax laws of the United States.

The details

Taxpayers may choose between using these standardized per diem rates or maintaining detailed records of actual travel expenses. The new guidance also sets transportation industry rates at $80 for domestic meals and $86 for travel outside the continental U.S., while keeping incidental expenses at $5 per day.

September 24, 2026: The IRS published Notice 2026-60.
October 1, 2026: The new per diem rates become effective.
September 30, 2027: The period for these new per diem rates concludes.

Market Dynamics

These updated rates reflect the ongoing adjustment of federal fiscal standards in response to fluctuating costs within the national economy. Notice 2026-60 serves as the primary regulatory instrument for standardizing deductible travel expenses across the United States.

Business travelers and employers can simplify their tax filings by utilizing the updated per diem substantiation method instead of tracking individual receipts. These adjustments provide a clearer baseline for managing travel budgets and potential tax deductions in the coming year.

The takeaway

Using the per diem method can significantly reduce the administrative burden of tracking small business travel expenses. Taxpayers should ensure they verify the specific status of their travel destinations before filing, as the high-cost locality list is subject to change.