Per diem allowances are created to account for partial days of travel. This applies only to meals per diem and max per diem (not to lodging per diem). Allowance deductions will apply only to the first day and last day to which per diem is charged an expense report. For example, if a rate for a particular city is 50 dollars a day and the traveler only spends half a day on the day he arrives and on the day that he leaves, then the traveler will get 25 dollars for the 1 st day, 25 dollars for the last day, and 50 dollars for all the other days in between.
To set up the per diem allowance deductions for partial days:
- Expand Expense.
- Expand Per Diem Setup.
- Click Allowance Rule.
- Click the Add button.
- In the Effective Date field, enter a date from which this allowance will be effective.
- If the allowance will only applies to one home operating unit, enter the Operating Unit.
- If the allowance will only applies to one country, enter the Country.
- If the allowance will only applies to one state in the selected country, enter the State.
- If the allowance will only applies within one city in the selected country/state combination, enter the City.
- In the Out Of Office field:
- Select 1/4 Day if the allowance is applied when the employee is out of the office for 1/4 of the day
- Select Half Day if the allowance is applied when the employee is out of the office for half of the day
- Select 3/4 Day if the allowance is applied when the employee is out of the office for 3/4 of the day
- Select All Day if the allowance is applied when the employee is out of the office for all day
- In Per Diem Type:
- Select Max Per Diem Rate if this allowance will be used instead of the max per diem rate.
- Select Meal Per Diem Rate if this allowance will be used instead of the meals per diem rate.
- Select Lodging Per Diem Rate if this allowance will be used instead of the lodging per diem rate.
- Make a selection from the Rate Type field drop-down
- Select Percentage of Per Diem if a percentage of the per diem rate is to be used instead of the full per diem rate.
- Select Absolute Value specified with a currency if a specific amount is to be used. You must select a currency with this selection.
- If the rule is based on a specific amount, then specify a currency in the Currency field.
- In the Value/Percentage field, enter a specific amount of money or a percentage that will be allowed by the terms of this rule.
- Note: This step is only available in versions 5.5.1 and up. In the Pocket Money(%) field, enter the percentage of pocket money user should receive. This will be added to the per diem base rate.
Example 1 - Allowance Rule
Transcontinental Consultants, Inc. (TCI) uses meals per diem. TCI pays first and last travel day per diem based on quarter days. For every quarter of the day in which the employee is Out of Office (ie., in travel status), he receives 25% of the meals per diem rate. For example, if the employee is out of the office during three quarters of the day, he will receive 75% of the meals per diem rate.
The table below illustrates the deductions for the first day and last day of a per diem charge, based on a per diem rate of $50.
Out of Office | Allowed | Deducted | Amount to User |
|---|---|---|---|
Full Day | 100% | 0 | $50.00 |
3/4 Day | 75% | 25%, or $12.50 | $37.50 |
Half Day | 50% | 50%, or $25.00 | $25.00 |
1/4 Day | 25% | 75%, or $37.50 | $12.50 |
Example 2 - Allowance Rule with Pocket Money
Transcontinental Consultants, Inc. (TCI) uses meals per diem. TCI pays first and last travel day per diem based on quarter days. For every quarter of the day in which the employee is Out of Office (ie., in travel status), he receives 25% of the meals per diem rate. For example, if the employee is out of the office during three quarters of the day, he will receive 75% of the meals per diem rate. TCI also pays an additional 20% of pocket money for meals per diem.
The table below illustrates the deductions for the first day and last day of a per diem charge, based on a per diem rate of $50.
Out of Office | Allowed | Deducted | Pocket Money | Amount to User |
|---|---|---|---|---|
Full Day | 100% | 0 | 20%, or $10.00 | $60.00 |
3/4 Day | 75% | 25%, or $12.50 | 20%, or $7.50 | $45.00 |
Half Day | 50% | 50%, or $25.00 | 20%, or $5.00 | $30.00 |
1/4 Day | 25% | 75%, or $37.50 | 20%, or $2.50 | $15.00 |
Setting Up the Example (As Illustrated in Example 1)
Allowances will depend on which of the four quarters of the day travel began and ended, therefore three allowances will be set up for the first day and three for the last day, one for each quarter. No allowance will be needed for travel in all four quarters, since there will be no deduction.
Since in our example, employees travel only in the U.S., and making no selection in the Country field applies the allowance to all countries, there will be no input in the Country, State or City fields, which will be absent from the tables.
In travel status during one quarter of the first day
Field | Selection | Reason/Effect |
|---|---|---|
Effective Date | Any date before the travel | Effective date must be before travel to be applied. |
Out of Office | 1/4 Day | The employee is in travel status for 1/4 of the day or less. |
Per Diem Type | Meal Per Diem | Company uses meals per diem. |
Rate Flag | Percentage of Per Diem | Company a percentage of the per diem. |
Value/ Percentage | 25.00 | User will receive 25% of the per diem if in travel status only during one quarter of the day. |
In travel status during two quarters of the first day
Field | Selection | Reason/Effect |
|---|---|---|
Effective Date | Any date before the travel | Effective date must be before travel to be applied. |
Out of Office | Half Day | The employee is in travel status for Half of the day of the day or less, but more than 1/4 of the day |
Per Diem Type | Meal Per Diem | Company uses meals per diem. |
Rate Flag | Percentage of Per Diem | Company a percentage of the per diem. |
Value/ Percentage | 50.00 | User will receive 50% of the per diem if in travel status only during two quarters of the day. |
In travel status during three quarters of the day first day
Field | Selection | Reason/Effect |
|---|---|---|
Effective Date | Any date before the travel | Effective date must be before travel to be applied. |
Out of Office | 3/4 Day | The employee is in travel status for more than half a day but less than 3/4 of a day |
Per Diem Type | Meal Per Diem | Company uses meals per diem. |
Rate Flag | Percentage of Per Diem | Company a percentage of the per diem. |
Value/ Percentage | 75.00 | User will receive 75% of the per diem if in travel status only during one quarter of the day. |
Effect on Expense Report
Employee Action | Per Diem Rate | Allowance's Effect | Employee Sees on Report |
|---|---|---|---|
Enters a (meals) per diem expense with a beginning date of 01/01 and selects 3/4 Day Out of Office. He enters an ending date of 01/04 and selects Half Day Out of Office | Meals-50 | 01/01 is reduced by 25%, or $12.50 because travel began in the 2nd quarter. | In the per diem expense detail, there will be a per diem total of $200 ($50 x 4), and a deduction field showing "-37.50." Clicking the amount of the deduction produces a screen explaining the two daily deductions of $12.50 and $25. |
Enters a lodging per diem expense with a beginning date of 01/01 and ending date of 01/04. | Lodging-$100 | No allowance applies to lodging per diem. | Employee sees lodging per diem of $300 ($100 x 3), since the dates for lodging per diem represent check-in and check-out. |
Variation
Allowances can be a specific amount instead of a percentage of the per diem rate. To create such an allowance rule:
- In the Rate Flag field choose "max per diem" or "meals per diem"
- Select the employee Currency.
- In the Value/Percentage field, enter the amount of money