Legal Definitions - per diem

Per diem is a Latin term meaning "for each day" or "by the day." In legal and business contexts, it refers to a fixed daily allowance paid to an individual to cover expenses incurred while performing work-related duties, particularly during travel. This allowance is typically a set amount for each day, rather than a reimbursement based on actual receipts, simplifying the process for both the individual and the organization. It commonly covers costs such as meals, lodging, and incidental expenses.

• Business Travel Expenses: A marketing manager travels for a five-day industry conference in a different state. Rather than submitting individual receipts for every meal, taxi ride, and minor expense, her company provides a $65 per diem allowance for each day she is away. This means she receives a total of $325 for her food and incidental costs, regardless of whether she spends exactly that amount or slightly less.

  This example illustrates per diem as a fixed daily payment for work-related expenses, simplifying the reimbursement process and providing a predictable allowance for the employee during travel.

• Consulting Service Fees: A highly specialized cybersecurity expert is hired by a large corporation to conduct a security audit. Instead of charging an hourly rate, the consultant agrees to a per diem rate of $2,000. For every day the consultant works on-site at the corporation, they are paid this fixed amount, regardless of the exact number of hours worked within that day.

  Here, per diem refers to a daily fee for professional services, highlighting its use as a fixed daily charge for labor or expertise rather than just expenses.

• Jury Duty Compensation: When an individual is called for jury duty, the local court system often provides a small per diem payment to jurors. For instance, a juror might receive $15 for each day they attend court, intended to help offset minor costs like transportation, parking, or a portion of lost wages, rather than fully compensating them for their time.

  This example demonstrates per diem as a daily stipend provided for civic service, acknowledging the daily commitment without necessarily covering all actual costs.