Per Diem vs Mileage: Can You Claim Both?

An accountable plan has three rules: the expense has a business connection, the employee accounts for it within a reasonable time, and the employee returns any excess. A per diem and a car allowance can both be paid under such a plan.

When both are paid, keep them separate in the claim. The per diem is tested against the federal rate for the place and the date. The mileage rate is tested against the federal mileage rate for the vehicle and the purpose. Neither figure limits the other.

The employer can pay less than the federal figure. The federal figure is the ceiling for tax-free treatment, not a minimum the employer must pay. A state rule can require reimbursement of necessary business expenses, and that rule is separate from the federal per diem.

The employer can pay more. Under an accountable plan, the amount above the federal figure for the days the employee can prove is reported as wages. It is not a second reimbursement and it is not tax-free.

A self-employed reader does not get a flat per diem for the whole day. The federal meals rate can be used for meals, and lodging is deducted at its actual cost, because there is no standard lodging amount. The standard mileage rate then covers the driving.

The meal deduction is generally limited to 50%. If the travel falls under the Department of Transportation's hours-of-service limits, the limit is 80% instead. A driver in the transportation industry whose work moves people or goods and regularly stops in areas with different meal rates can use one special standard meal allowance for the year instead of the area-by-area figures.

Do not deduct fuel, repairs, insurance or depreciation on top of the standard mileage rate for the same miles. Those costs are already inside the rate. Parking and tolls stay separate, and a per diem does not pay for them.

A per diem figure is not an entitlement to a deduction. It is a way to measure a meal cost. If there was no business travel away from home, there is no meal cost to measure.

A flat daily amount is not automatically a per diem. If the employer pays it without requiring an account of the trip, it is wages. If it is paid under an accountable plan, the part that pays lodging and meals is measured against the federal per diem, and the part above it is reported as wages.

A sentence in a policy saying that the daily amount includes the car does not change what the payment is. The question is what the payment reimburses and whether the employee accounts for it. A payment that covers the driving needs a mileage basis to be treated as a car allowance.

If you were told that the per diem includes the car, ask for the policy in writing and read the line that describes what the daily amount covers. If it covers lodging and meals, the driving is a separate cost. If it is a flat amount for everything, the mileage is already inside the amount and cannot be claimed again.

The per diem rule applies to travel from October 1, 2026 through September 30, 2027. The US mileage rate applies to the date of the trip and changed on July 1, 2026.

Last checked October 31, 2026 against IRS Publication 463, the GSA bulletins for the fiscal year and the vehicle rate, and the GSA per diem table.

The per diem table is GSA's for the continental United States, the Defense Travel Management Office's for Alaska, Hawaii and the US territories, and the Department of State's for foreign travel.

The mileage figure is the IRS standard mileage rate, which GSA also uses for its vehicle rate. The rate finder lists every country covered, and the current US rate carries the figure for the period in force.