A more thorough explanation:

Per diem is a Latin phrase that means "per day." It refers to a daily amount of money paid to a person for expenses incurred during work travel. These expenses usually include accommodation and meals, but other expenses may also be included.

Per diem is usually calculated based on a set rate, rather than the actual expenses incurred. For example, if the per diem rate for meals is $20, but a person only spends $10, they usually do not need to pay back the extra funds.

The federal government sets per diem rates each year, which vary by locality. Many private companies and institutions also use these rates.

John is a sales representative who travels frequently for work. His company pays him a per diem of $100 per day for expenses. This means that John can spend up to $100 per day on accommodation, meals, and other expenses, and his company will reimburse him for those expenses.

Another example is a government employee who travels to a conference. The government sets a per diem rate of $150 per day for expenses. This means that the employee can spend up to $150 per day on accommodation, meals, and other expenses, and the government will reimburse them for those expenses.

These examples illustrate how per diem works by providing a set amount of money for daily expenses during work travel.