This article showcases how Per Diem Expenses can be managed in a Mobile App.
A per diem payment is a fixed, predetermined daily allowance that a company pays to its employees for lodging (hotels), meals, and incidental expenses that those employees incur while they travel for work. Per diem rates can be based on the time of year, the travel location, or both. When you create a per diem rule, you can specify that a percentage of the per diem rate will be withheld if an employee receives complimentary meals or services. You can also set a minimum number of hours and a maximum number of hours that the per diem rate can be applied to an employee’s travel.
The per diem expenses are calculated as the total allowance that is offered per day minus the meal reduction (cost of complimentary meals) that is provided to the employee.
Configuration of Expenses
1. Create Expense Category for ‘Per Diem’.
2. Configure Per Diem fields in Expense Management Parameters. Please note that ‘Calculate meal reduction by’ is set to ‘Meal type per trip’.
3. Define per diem locations.
4. Configure Per Diem amounts for Hotel, Meal and other expenses.
Also, optionally define the ‘Per diem rate tiers’ for First day and/or Last Day. This basically defines per diem rate that are valid between specific start and end dates for lodging, meals, and other expenses.
Create Per Diem Expense
1. Navigate to Expense Management Workspace and select new expense report or an existing expense report.
2. Add a new expense. In the Category field, select Per diem. Select the location, and the start and end dates of your trip.
The per diem for lodging, meals, and incidentals (other expenses) is calculated based on the daily allowance that is set for the selected location.
For Vancouver location, the daily allowance is USD 500 for Hotel, USD 75 for meals, and Zero dollar for incidentals.
The start date is 28th April 12 AM and the end date is 30th April 8 PM, i.e., 3 days. First and Last days will be counted since the stay is for more than minimum 4 hours. The Hotel allowance for first day is USD 500 and zero dollar for the last day. The Meal allowance is 50% i.e., USD 37.5 for first and last day. Here are the calculations:
- Total amount payable = (2 × 500 + 0) + (37.5 + 75 + 5) = USD 1,150
- Meal and other portion of the total amount = 5 + 75 + 37.5 = USD 150
If breakfast, lunch, and dinner were provided during the trip, those meals must be accounted for as a meal reduction.
Scenario 1: Per diem where meal reductions are based on meal type per trip
On the Expense management parameters page, the Calculate meal reduction by field is set to Meal type per trip. The meal reduction is 20 percent for breakfast, 40 percent for lunch and 40 percent for dinner.
Here are the calculations if 2 breakfasts and 2 two lunches and zero dinners were provided to the employee:
- Meal reduction = (2 × [75 × 20%]) + (2 × [75 × 40%]) + 0 = (2 × 15) + (2 × 30) = USD 90
- Meals and incidentals = 150 – 90 = USD 60
- Total amount payable = Total allowance – Meal reduction = 1150 – 90 = USD 1,060
Scenario 2: Per diem where meal reductions are based on meal type per day
Now, on Expense management parameters page, the Calculate meal reduction by field is set to Meal type per day. The meal reduction is 20 percent for breakfast, 40 percent for lunch and 40 percent for dinner.
Expense management parameters
Per Diem Amounts
Now, create new Expense.
The start date is 25th April 12 AM and the end date is 27th April 8 PM, i.e., 3 days. First and Last days will be counted since the stay is for more than minimum 4 hours. The Hotel allowance for first day is USD 500 and zero dollar for the last day. The Meal allowance is 50% i.e., USD 37.5 for first and last day. Here are the calculations:
- Total amount payable = (2 × 500 + 0) + (37.5 + 75 + 37.5) = USD 1,150
- Meal and other portion of the total amount = 37.5 + 75 + 37.5 = USD 150
In this case, in the Meals grid, clear the checkboxes to indicate which meals were provided to employee during the trip.
Here are the calculations if breakfasts were provided on first 2 days and dinner was provided on last day to the employee:
- Total Meal reduction = (37.5 × 20%) + (75 * 20%) + (37.5 * 40%) = 7.5 + 15 + 15 = USD 37.50
- Meals and incidentals = 150 – 37.50 = USD 112.50
- Total amount payable = Total amount – Meal reduction = 1,150 – 37.50 = USD 1,112.50
Scenario 3: Per diem where meal reductions are based on number of meals per day
Now, the system sets the “Calculate meal reduction by” field to “Number of meals per day” on the Expense Management parameters page.
In this case, the meal reduction is based only on the # of meals provided, and not on the type of meal (Breakfast/lunch/dinner) provided.
Expense management parameters
Per Diem amounts
Define Meal reduction percentage for one meal, two meal and three meal:
- One meal: Meal reduction = 20%
- Two meals: Meal reduction = 60%
- Three meals: Meal reduction = 100%
Now, create new Expense.
The start date is 1st March 12 AM and the end date is 3rd March 8 PM, i.e., 3 days. The system will count the first and last days since the stay lasts for more than the minimum of 4 hours. The Hotel allowance for first day is USD 500 and zero dollar for the last day. The Meal allowance is 50% i.e., USD 37.5 for first and last day. Here are the calculations:
- Total amount payable = (2 × 500 + 0) + (37.5 + 75 + 37.5) = USD 1,150
- Meal and other portion of the total amount = 37.5 + 75 + 37.5 = USD 150
In this case, in the Meals grid, clear the checkboxes to indicate which meals were provided to employee during the trip.
About the Expert
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Ravi Goyal, Senior Consultant, OnActuate
Ravi has worked in the Microsoft Dynamics ecosystem for more than 18 years for a variety of projects spanning North America and India. He has expertise in modules like Procurement and Sourcing, Sales, and Marketing, Accounts Payable, Accounts Receivable, Inventory Management and Expense Management. Additionally, he also holds multiple certifications like MB 300, MB 330, MB 800, and DA-100 along with other Microsoft Azure fundamental certifications. The “OneByte” blog series are technical how-to articles by OnActuate’s expert consultants covering technologies like Dayforce and Microsoft Business Applications (Microsoft Dynamics, Power Platform). Have a topic you’d like to learn more about? Email us at info@onactuate.com! |
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