When it comes to per-diem, the first thing that typically comes to mind is budgeting for a business trip.
But did you know that you can also use a per-diem budget to help plan for upcoming vacations?
It’s true!
Best of all, implementing a per-diem budget system is a great way to help you manage your expenses during a trip without the risk of spending too much per day.
A per-diem budget can be used for both business and pleasure trip planning.
Below, you’ll get examples of both.
Developing a Per-Diem Budget
Here’s a quick guide that will aid in developing a per-diem budget for yourself and even your employees.
What is a Per-Diem?
Simply put, per-diem is a daily allowance for travel expenses such as food, lodging, and incidental expenses.
Understanding What Costs are Covered
As noted above, here are a few typical costs that are covered by a per-diem budget.
1. Lodging
You should receive a daily allowance for lodging based on the location and time of year.
2. Meals
You should receive a daily meal allowance for each individual meal including breakfast, lunch, and dinner.
3. Incidentals
According to The Federal Travel Regulation Chapter 300, Part 300-3, miscellaneous and incidental expenses include tips to porters, hotel staff, baggage carriers, etc.
Typical Per-Diem Rates
Every year, the U.S. General Services Administration (GSA) publishes a list of standard per diem rates.
Although these are only recommended, these per-diem rates are a great way to get a feel on how much you should be spending on meals and lodging.
Note that rates are adjusted based on location so just because it’s a certain amount in Orlando doesn’t mean it’s the same in Anaheim.
Let’s use Orlando (Disney World) as the first example to see what the past two years’ per-diem rates have been for lodging and M&IE (meals and incidentals).
Orlando 2021
- Lodging = $129 a day (April – December) and $153 a day (January – March)
- Meals and Incidentals = $66 (breakfast $16, lunch $17, dinner $28, incidentals $5)
Orlando 2022
- Lodging = $129 a day (April – December) and $156 a day (January – March)
- Meals and Incidentals = $69 (breakfast $17, lunch $17, dinner $31, incidentals $5)
Now let’s compare Orlando’s per-diem rate to Anaheim’s (Los Angeles and neighboring areas including Orange County) for the same two years.
Anaheim 2021
- Lodging = $182 a day
- Meals and Incidentals = $66 (breakfast $16, lunch $17, dinner $28, incidentals $5)
Anaheim 2022
- Lodging = $182 a day
- Meals and Incidentals = $74 (breakfast $17, lunch $18, dinner $34, incidentals $5)
As you can see, at least between Los Angeles and Orlando, the per-diem rate for meals has increased quite significantly yearly while lodging has been consistent.
But keep in mind, regardless of your location, the meals and incidentals per-diem rate is only 75% of the daily allocation on your first and last day of travel.
Creating an Itinerary
(If you’re an employer or company, you can skip this section).
Allocating Funds
Fund allocation is extremely important for leisure vacation planning especially if the goal is to stick with a per-diem budget system for your upcoming trip.
Employers and companies planning for business trips can skip this section when creating an itinerary.
Let’s use Disney World in Orlando, FL as an example for allocating your funds.
Hotel and Resorts
If you’re coming to Orlando, nine times out of ten, you’re going there to visit some theme parks. So whether if it’s Disney World, Universal Studios, or even Sea World, most of your day may be spent at the parks as opposed to the hotel (at least that’s usually the case for me).
So with that being said, I don’t think you really need to break the bank for lodging.
So, sticking with the recommended $129 or less rate for the Orlando area is a great starting point. Best of all, you can actually still stay on Disney World property as a Disney hotel like Pop Century for under $129 off-season.
Food
Food, especially at a touristy destination like Disney World is pretty expensive.
But you can actually eat and still not feel hungry at the end of the day for around $38 a day, even if you’re eating every meal on Disney property.
If you’re a big eater or just want to experience some cool dining spots or a ton of mouthwatering snacks across Disney World, you should budget to spend around $104 a day per person.
Park Tickets
Hate to say it, but, theme park tickets may be the most expensive part of your trip. Unfortunately there really aren’t too many ways to save money on tickets unless you’re a military veteran or Florida resident. Sure, you can save a few bucks using Undercover Tourist, but the savings are not substantial.
If you plan to visit all four Disney World parks, you will need to get a 4 day ticket. Sometimes 3 can work since you won’t need all day at Animal Kingdom, but a 4-day ticket is the safest option.
As of 2022, a four-day ticket (without Park Hopper) is $426.40 per person. And a four-day ticket (with Park Hopper) is $511.40.
Transportation
Regardless if you’re flying, driving, or taking the train, transportation can be the cheapest or most expensive part of your trip.
Whether if you’re taking one of the $55 roundtrip airfares on Spirit Airlines, or driving your Tesla to Orlando with affordable supercharging, transportation costs are important to factor in to your per-diem budget fund allocation.
You can still find some pretty affordable airfare to Orlando if you’re not visiting during Spring Break, Easter, or any of the major holidays like Christmas or Thanksgiving, so personally I would budget for around $300 per person for airfare, and that’s on the high side for U.S. domestic travel. Realistically it could be under $200, but with the rising jet fuel prices, $300 seems reasonable.
One additional expense to budget for is parking and Lyfts. Unless you’re staying on Disney Property or at a resort with free shuttle services to and from the parks, you might either find yourself paying for parking at the parks or paying for a Lyft.
If this is the case, $30 a day for parking is the typical rate while Lyfts can range drastically depending on where you are staying.
Miscellaneous
Besides tipping hotel staff, other typical miscellaneous spending in Orlando/Disney World includes buying souvenirs, tours, and activities (such as mini-golf, Top Golf, go-carting, etc).
It’s hard to say how much you should allocate for these random expenses but if you don’t care for souvenirs or extra activities besides the free ones available at the park, you really won’t have to allocate that much, if anything.
Reducing Expenses
I’m a firm believer in never overspending.
And if you’re an employer, this section is especially important for you.
If you’re an employer, it’s best to choose a hotel for your employee(s) under the GSA per diem rate but still a high-quality property. The last thing you want to do is skimp out on the hotel just to save a few bucks only to find out that the property is very inadequate or in a terrible location.
When it comes to meals however, there really isn’t much that an employer can do that doesn’t require providing a meal per-diem rate that’s under the GSA rate.
Now if you’re vacation planning using a per-diem budget system, the same goes for the hotel. Don’t break the bank and choose an affordable yet comfortable accommodation in a great location.
And for food, you can opt for cheaper, fast food, or fast casual options to help save some money. Best of all, if your hotel serves a free breakfast, that’s always one way to save some extra money.
Tax Considerations
There are normally no additional tax implications for companies and employers that use the standard federal government per diem rates. The only thing that must be done is that an expense report must be filed within 2 months.
However, if you offer a higher rate than the official federal government per diem rate, the excess amount becomes taxables which in return affects not the employee’s taxable income as well as the tax liability the employer is responsible for.
That’s why if you’re an employer, it’s always best to stay at or below the standard per diem rate to avoid any excess taxing.
So in conclusion
A per diem budget is a great way to allocate your funds and plan a trip without any surprises expenses.
Whether you’re an employer looking to establish a suitable per-diem budget for your employee’s next business trip or work retreat, or if you’re a Disney loving looking to have the time of your life at Disney World without spending way too much, sticking to a per-diem budget is a great way to accomplish both.
Leave a Reply