Traveling tradesmen—pipeline welders, millwrights, boilermakers, turnaround crews, and industrial electricians—depend on per diem to cover the real cost of living away from home. The General Services Administration publishes location-specific rates that set the standard for federal contracts and serve as the benchmark most private-sector employers follow for tax-free reimbursement.
Getting per diem right matters for both sides. Workers who understand the rate structure can negotiate packages that actually cover expenses. Employers who follow GSA guidelines protect their tax deductions and avoid converting per diem into taxable wages. This guide covers how GSA rates work, the first/last day rule, tax implications, and the practical realities of per diem for craft workers who spend months on the road.
How GSA Per Diem Rates Work
GSA per diem has two components: lodging and Meals & Incidental Expenses (M&IE). Lodging rates vary dramatically by location—from $107/night in standard areas to $300+/night in high-cost cities like San Francisco and New York. The M&IE rate covers breakfast, lunch, dinner, and incidental expenses (tips, laundry, etc.) and falls into five tiers: $59, $64, $69, $74, and $79 per day depending on the location's cost of living.
The M&IE breakdown allocates specific amounts to each meal. For the $59 tier: breakfast $13, lunch $15, dinner $26, incidentals $5. For the $79 tier: breakfast $18, lunch $20, dinner $36, incidentals $5. These breakdowns matter when an employer provides one or more meals (common on remote sites with catered lunch)—the per diem is reduced by the applicable meal amount.
Rates are updated annually on October 1 and published at gsa.gov. Non-standard areas (CONUS locations not specifically listed) default to $107 lodging and $59 M&IE. Always look up the specific county or city for the work location, as neighboring counties can have significantly different rates, especially near military bases and major metro areas.
Per Diem & Travel Pay Calculator
Calculate per diem, lodging, mileage, and mobilization costs with GSA rate tiers, first/last day 75% rule, meal deductions, and IRS mileage rates. Includes rate lookup guidance.
The 75% First and Last Day Rule
On the first and last day of travel, the M&IE allowance is reduced to 75% of the full daily rate. If the full M&IE is $69/day, the first and last day allowance is $51.75. This applies regardless of what time you depart or arrive—even if you leave at 5 AM on the first day, you only get 75%. The rule is a simplification that replaces the old method of deducting specific meals based on departure/arrival times.
The lodging portion is not affected by the 75% rule—you receive the full lodging allowance for any night you need to stay. This matters for planning purposes: a 5-day trip (Monday departure, Friday return) gets 3 full M&IE days (Tuesday–Thursday), 2 days at 75% (Monday and Friday), and 4 nights of lodging (Monday–Thursday). Some employers simplify by paying 100% for all days, which is permissible but the excess becomes taxable income above the GSA rate.
For long-term assignments (common in industrial construction), the first/last day rule only applies to the initial mobilization and final demobilization, not to each workweek. A welder on a 6-month turnaround gets 75% on day one and day 180, with full M&IE for every day in between, including non-work days if the worker remains at the assignment location.
Taxable vs. Non-Taxable Per Diem
Per diem paid at or below the GSA rate is non-taxable to the employee and deductible for the employer, provided three conditions are met: (1) the payment is for travel away from the employee's "tax home" (the general area of their primary workplace), (2) the employee has a legitimate tax home (not an itinerant worker), and (3) the assignment is temporary (expected to last less than one year). If any of these conditions fails, per diem becomes taxable W-2 wages.
The "tax home" issue is the biggest gray area for traveling trades. An ironworker who works 10 months a year at various out-of-town locations and 2 months at home may still have a tax home at their permanent residence, as long as they maintain a dwelling there and incur duplicate living expenses while traveling. However, an itinerant worker with no permanent residence and no recurring work location has no tax home—their per diem is fully taxable.
Per diem amounts exceeding the GSA rate are taxable on the excess. If the GSA M&IE for the area is $69/day but the employer pays $100/day, the $31 excess must be reported as W-2 income and is subject to income tax, FICA, and FUTA. Many contractors set per diem exactly at the GSA rate to avoid this complication. Others pay a higher flat rate and run the excess through payroll as taxable wages.
Where to Look Up Current Rates
The primary source is gsa.gov/perdiem, which provides a searchable database by city, state, or ZIP code. Rates are organized by fiscal year (October 1 – September 30) and some high-tourist areas have seasonal variations. Always verify the rate for the specific month of travel, not just the annual default.
For Alaska, Hawaii, and US territories, per diem rates are published by the Department of Defense (DTMO) rather than GSA. These are typically higher than CONUS rates and are updated more frequently. International per diem for work in Canada, Mexico, or overseas is also published by DTMO at travel.dod.mil.
Many payroll systems and contractor management platforms (LCPtracker, eMars, B2Gnow) have built-in GSA rate lookups that auto-populate based on the project location. If your system doesn't, download the full CONUS per diem table as a CSV from gsa.gov and import it into your payroll system at the start of each fiscal year. This prevents the common error of using outdated rates from the previous year.
Per Diem & Travel Pay Calculator
Calculate per diem, lodging, mileage, and mobilization costs with GSA rate tiers, first/last day 75% rule, meal deductions, and IRS mileage rates. Includes rate lookup guidance.
Negotiating Per Diem Packages
For craft workers, per diem is often the difference between a job being worth taking and not. A $40/hr welding job in a remote area with $150/day per diem is effectively $58.75/hr (assuming a 10-hour day), whereas the same rate with no per diem means paying $100+/day out of pocket for a motel and meals. Experienced travelers negotiate the total package: hourly rate + per diem + mobilization/demobilization travel pay + R&R schedule (fly-out rotations, typically every 2–4 weeks).
Pipeline welders and turnaround craftsmen in high-demand specialties commonly negotiate per diem above GSA rates, with the understanding that the excess is taxable. A typical package might be $55/hr + $150/day per diem + round-trip airfare every 3 weeks. The per diem portion above GSA is run through payroll as taxable, but the net take-home still makes the arrangement worthwhile for both parties.
For employers, structured per diem packages are a powerful recruiting tool for hard-to-fill travel positions. Offering actual-expense reimbursement (receipts required) versus a flat per diem rate each has pros and cons. Flat rates are simpler to administer and preferred by most craft workers. Actual-expense reimbursement gives the employer more control but creates administrative burden and can feel paternalistic to experienced travelers who manage their own expenses efficiently.