IRS Will Increase Business Per Diem Rates for 2027

Business travelers can soon claim higher daily expense rates for lodging, meals, and incidentals starting October 1.

Updated on Sept. 24, 2026 in Taxes

Bold flat-color editorial illustration of a suitcase and suit jacket, representing business travel expense policy. — The IRS updated federal business travel per diem rates for 2027 in Notice 2026-60, allowing taxpayers to better substantiate lodging and meal expenses. 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 has released Notice 2026-60, which updates federal per diem rates for business travel effective October 1, 2026. These changes allow taxpayers to adjust how they substantiate travel-related costs throughout the coming year.

Why it matters

Updating these figures helps business travelers and their employers accurately track tax-deductible travel expenses. Using these rates can simplify record-keeping for lodging, meals, and incidentals during business trips.

The new per diem rates include $329 for high-cost areas, a $10 increase, and $230 for low-cost areas, a $5 increase. The federal threshold for defining a high-cost locality remains set at $280.

The players

Internal Revenue Service

The federal agency responsible for tax administration, which sets guidelines for substantiating business travel expenses.

The details

Taxpayers may substantiate business travel costs by using these IRS-provided per diem rates rather than tracking actual receipts. The method is optional, allowing travelers to choose between the standard per diem allowances or maintaining specific documentation of actual expenses incurred. The high-low substantiation method relies on these defined rates to cover lodging, meals, and incidental expenses during qualifying business travel.

September 24, 2026: IRS published Notice 2026-60.
October 1, 2026: New per diem rates become effective.
September 30, 2027: Period for the new per diem rates ends.

Money Landscape

These updates follow the standard annual cycle for adjusting travel reimbursement thresholds to reflect current market costs. The adjustments align with the broader framework set by Notice 2026-60 to maintain consistency in business expense reporting.

If you travel for business, consider whether using the IRS per diem method simplifies your expense reporting compared to tracking actual receipts. Consult with a tax professional to determine if these updated rates better serve your specific business travel and record-keeping needs.

The takeaway

These adjusted rates provide a practical tool for substantiating business travel expenses without the need to keep every individual receipt. Review your company travel policy or speak with a tax professional to see how these new limits apply to your upcoming professional travel plans.