What is GSA for those working over 50 miles from their permanent residence. The General Services Administration defines it by the zip code and term of the year for both lodging and meals. To make things more transparent to our contract employees, we combine the per diem and salary with the explanation that a portion of the salary will be untaxed.
Some agencies will break this out such that your per diem for lodging and meals appears to be separate. It makes it seem like it is more, but it’s not. It comes down to the same numbers in your paycheck. For clear accounting and understanding of pay, combine the numbers to find the total compensation package.
An example
Travel contract pay per month: $10,000 (defined in the contract, the agency and client’s budget)
City: Los Angeles using zip code 90032
Permanent home: San Francisco (more than 50 miles distance)
Year: 2023
Housing: $182 per night
Meals: $74 (breakfast $17, lunch $18, dinner $34, incidentals $5)
- Hourly: $62.50
- Daily per diem: $256
- Weekly per diem $ 1,792
- Total weekly compensation: $2,500
- Total compensation per month: $10,000
- Untaxed portion of income: $7,168 will not be taxed; the balance $2,832 will be taxed.
For any given area in Los Angeles, $256 should be enough to cover lodging and food along with incidentals or living expenses per day. Defined by the GSA.
There may be advertisements that read: $2,000 -3,000 PLUS PER DIEM!
This the exact same job with the exact same numbers, but the numbers here look better because you are getting 20% more. The numbers are still the same, but the representation and break down is different. You should always ask about the total guaranteed hours per week and the total per diem per week. Then you will have a true picture of the compensation.
Note: there may be other factors that will add to the compensation such as holiday pay, overtime, on call, and call back. In any and every instance, one should confer with their CPA to see how this effects your taxes and reporting to the IRS.