IRS Updates Per Diem Rates for Travel Expenses Effective October 1

Notice 2025-54 from the IRS updates the per diem rates taxpayers can use to cover lodging, meals and incidental expenses when traveling away from home. The rates take effect October 1, 2025, and include a special rate for the transportation industry, a rate for incidental expenses only, and the high-low rates for certain high-cost areas.

Per diem rates provide a simplified way to substantiate travel expenses without tracking every individual receipt. Taxpayers who prefer can still deduct actual expenses if they maintain adequate records, such as receipts or other proof of costs.

These rates are based on rules outlined in Rev. Proc. 2019-48 and are published annually by the IRS and the General Services Administration. Employers and employees who travel for work can use the rates to streamline expense reporting and ensure compliance with IRS rules.