Last updated: February 2026
Per diem rates are one of the simplest ways to compensate employees for business travel. Understanding how they work can make business travel easier for your company and make sure you stay tax-compliant.
Here’s what you need to know.
What are per diem rates?
With per diem rates, the employer pays the employee a fixed amount to cover expenses and incidentals for business travel. “Per diem” means “per day,” so most per diem rates are set as a daily allowance.
Per diem rates may be used alongside travel reimbursements, or they may be used independently. A major benefit of per diem rates is that it allows the employee to cover business travel costs without having to keep every receipt.
How are per diem rates calculated in Australia?
For Australian employees, per diem rates are managed by the ATO (Australian Taxation Office). Per diem allowance rates are calculated based on:
the employee’s salary
the length of time the employee is traveling
where the employee is traveling
Since travel and living costs can vary significantly across Australia, the ATO provides different per diem rates for high-cost country centres compared to regional areas.
What’s covered by per diem rates in Australia
Per diem rates in Australia can be used to cover:
accommodation in commercial establishments (domestic travel only)
meals and drinks that fall within the time of travel
incidental travel expenses (i.e. fees and tips and other small purchases that are necessary business expenses)
What’s not covered by per diem rates in Australia
Per diem rates generally do not cover transportation (i.e. flights, rental cars). If accommodation is provided by the employer, the employee cannot also claim accommodation amounts for per diem rates.
How much is per diem in Australia?
Per diem rates in Australia vary based on your income and the area you’re traveling to.
The salary bands are broken into three tiers:
Tier 1: for salaries of $148,250 or less.
Tier 2: for salaries between $148,251 and $263,850.
Tier 3: for salaries of $263,851 or more
Source: ato.gov.au.
Here’s how per diem rates shake out for Australia’s biggest cities, based on salary tiers.
Per diem rates in Sydney, NSW
Per Diem Rates Sydney (2025-2026)
Per diem rates in Canberra
Per Diem Rates Canberra (2025-2026)
Per diem rates in Melbourne, VIC
Per Diem Rates Melbourne (2025-2026)
Per diem rates in Adelaide, SA
Per Diem Rates Adelaide (2025-2026)
Per diem rates in Brisbane, QLD
Per Diem Rates Brisbane (2025-2026)
Per diem rates in Perth, WAS
Per Diem Rates Brisbane (2024)
Per diem accommodation rates in Australia
For other cities in Australia, per diem rates for meals and incidentals remain the same across salary bands, while accommodation rates vary.
Here are per diem accommodation rates for some common country centres. See the ATO for full list of country centres and per diem accommodation rates.
Per diem rates for international business travel
For international business travel, per diem rates are set by income tiers and destination. With overseas travel, accommodation expenses are always accounted for separately.
Alternatively, employers can use a business travel booking platform like Perk to easily book, manage, and expense employee’s overseas accommodations and other travel expenses.
For meals and incidental expenses, countries are split into six cost groups. Here’s how the per diem rates break down.
Per diem rates for international business travel, Tier 1 Salary:
Per diem rates for international business travel, Tier 2 Salary:
Per diem rates for international business travel, Tier 3 Salary:
Cost groups by country
Making business travel easier
Per diem rates are an excellent way to reimburse employees for the costs of business travel while reducing administrative burden for employees, management, and finance teams.
Since per diem rates won’t cover every expense, you can further reduce administrative burden by managing employee travel through a travel management platform. With a travel booking platform on your side, your employees can book, expense, and manage travel faster than ever.
FAQs on Australian Per Diem Rates
- In general, employees do not need to keep or return receipts to collect per diem rates in Australia. A few exceptions exist:
- For international business trips, all accommodation must be fully substantiated with receipts or other documentation. Your company can then provide reimbursement for the actual expenses.
- For international trips lasting longer than six nights in a row, records or receipts must be kept to verify expenses, even if you’re being reimbursed based on per diem rates.
- If an employee spends more than the “reasonable daily rates” set by the ATO and would like to claim the higher amount, they need to keep and present receipts.
- Per diem rates are not taxable in Australia as long as they fall within the ATO’s reasonable amounts (listed above). An employer may choose to provide a higher per diem rate for employees, but the amount above the set per diem rate is considered taxable income.
- Per diem rates are typically paid in advance as a travel allowance. Alternatively, the employer can provide a per diem rate reimbursement once the employee has returned from their trip.
Written by
){kind=small}
Growth Marketing Director
:format(webp))
:format(webp))