GSA Per Diem Rates FY2027: What Changed and How to Update Your Travel Policy

GSA's FY2027 standard per diem rates take effect October 1, 2026: $113 for lodging and $68 for meals and incidental expenses. For finance teams using GSA rates, the next step is to confirm when their policy adopts the new rates and how their expense system handles the change.

A trip that starts in September and ends in October is a useful test. Can your team apply the appropriate rates to each travel date while preserving earlier rates for reports submitted later?

GSA's federal effective date does not automatically determine every private employer's reimbursement policy. IRS transition rules may allow continued use of earlier rates during October through December, subject to the applicable method and consistency requirements.

The compliance gap is rarely limited to one day. It persists until the finance team identifies the change, pulls the new tables, updates the system, and communicates the change. This is a cycle that keeps most teams in manual-reconciliation mode for three to six weeks. Reimbursements keep going out in the meantime, and overpayments become taxable wages you have to unwind while underpayments become a queue of manual adjustments.

For government contractors and grant-funded organizations, the exposure is bigger, because inconsistent rate application across a fiscal year boundary is the kind of thing an auditor flags.

What Changed in the FY2027 GSA Per Diem Rates

For fiscal year 2027, the standard rate for the continental United States (CONUS) combines a $113 nightly lodging limit with $68 for meals and incidental expenses (M&IE), totaling $181 for a full day. These rates apply from October 1, 2026, through September 30, 2027, in locations without a listed non-standard rate. The FY2026 standard amounts were $110 for lodging and $68 for M&IE.

Here is where the numbers stand.

Source: GSA Per Diem Bulletin FTR 26-01, GSA per diem rates, and FTR 27-01.

Two things are worth knowing about how these rates get set.

GSA builds locality lodging rates from contractor-provided average daily rate data for local hotels, and if a city and its county are both absent from the table, that location falls under the standard CONUS rate.

That second rule is where policy errors hide. Teams assume a mid-size metro has its own rate. Often it does not.

Check the destination in the GSA per diem rates lookup rather than assuming a city has its own rate. Review the listed locality boundaries and travel dates, since lodging rates can vary by season.

What the October 1 Effective Date Means for Trips That Span Fiscal Years

If your organization's policy adopts FY2027 GSA rates on October 1, a trip spanning September and October may use two rate schedules.

Consider a traveler who leaves September 28 and returns October 3. The lodging nights of September 28, 29, and 30 fall under the FY2026 schedule. The nights of October 1 and 2 fall under FY2027. Apply the relevant location and seasonal rate to each night.

Submitting the report in October should not move the September lodging nights onto the newer schedule.

On the first and last day of travel, federal travelers are eligible for 75 percent of the M&IE rate.

The following table shows the federal 75 percent first- and last-day M&IE amounts. Private employers should document the partial-day rule used in their own policy.

Source: GSA M&IE breakdowns. Incidental expenses account for $5 in every CONUS tier.

This is the same rule DATABASICS applied when the IRS raised the standard mileage rate mid-year: preserve the earlier rate for travel before the change rather than recalculating everything after it. 

Write the boundary rule into your policy once, in plain language. If your policy adopts new GSA rates each October 1, document that choice explicitly: "For travel covered by this policy, apply the GSA rate in effect for each travel date, including trips spanning September 30 and October 1."

Test the rule in your expense system before the change takes effect. Then make sure your system enforces it without anyone remembering to do so.

High-Low Method vs Locality Rates: What Should Your Policy Specify?

The IRS offers a shortcut. Under the high-low substantiation method, you skip the locality table entirely and use two rates.

For travel on or after October 1, 2025, IRS Notice 2025-54 set those rates at $319 per day for high-cost localities and $225 per day for all other CONUS travel. The M&IE portions are $86 and $74, and a high-cost locality is one with a federal per diem rate of $272 or more.

The IRS typically publishes the following year's notice in September. Expect the 2026 to 2027 rates then.

So which method belongs in your policy?

High-low fits organizations with light, concentrated travel. If your people fly to four cities and travel is not billable, two rates beat 300. You gain speed and lose some cost precision.

Locality rates fit anyone allocating travel cost to a contract, grant, or fund. Government contractors, nonprofits with donor-restricted budgets, and professional services firms that bill travel through to clients all need the real number. A flat $225 in Wichita is an overpayment your funder may not cover.

Taxpayers using the high-low rates must comply with IRS Rev. Proc. 2019-48. Pick one method, document it, and apply it consistently.

The honest answer for most mid-market finance teams is that locality rates are only harder if you maintain them by hand.

Before You Apply the New Rates

• Confirm the rate source, reimbursement method, and effective date in your policy.
• Assign responsibility for updating and approving the rates.
• Preserve earlier rates for travel that occurred before the change.
• Test a report spanning September 30 and October 1, including first- and last-day adjustments.
• Confirm how exceptions are flagged, reviewed, and documented.

How Centralized Rate Tables Keep Reimbursements Correct on October 1

The reason per diem updates hurt is almost never the rates themselves. It is that the rates usually live in four places at once:

• Spreadsheet: The travel coordinator's file, updated by whoever remembers to update it.
• Handbook: A PDF in the employee handbook, revised once a year at best.
• Expense tool: A hard-coded value that nobody owns.
• Memory: The number a manager remembers from last year.

DATABASICS Expense maintains per diem rates in one effective-dated table. When GSA publishes FY2027, you update the table once.

Every rate then applies by travel date automatically. A September 28 to October 3 trip splits itself. Nobody calculates the boundary by hand, and nobody gets it wrong.

The rules engine checks each line at submission, not at month-end. If a claim exceeds the allowable rate for that location and date, the submitter sees it immediately. Your approvers stop being the control.

Approved amounts then post to your general ledger through native integrations with Sage Intacct, NetSuite, Microsoft Dynamics 365, and Deltek Costpoint. No re-keying, and no reconciliation of a spreadsheet against the ERP.

For government contractors, the audit trail is the point. Every per diem calculation carries the rate applied, the date, the location, and the approval chain.

You can also learn more about these requirements in our DATABASICS customer stories. For CALIBRE Systems, GSA per diem calculations and validations sit alongside project cost accounting and approval workflows in its solution. Creative Associates International identified government per diem setup and a currency feed among its requirements for a combined time, expense, and leave management system. Both examples show why per diem management belongs within the broader accounting workflow.

Frequently Asked Questions

When will GSA release the FY2027 per diem rates?

The GSA typically releases CONUS per diem rates in August prior to the October 1 effective date. This year they were released in early September, so the official FY2027 per diem rates have now been published and finalized.

What is the standard CONUS per diem rate?

The FY2027 standard CONUS rate is $181 per day, made up of $113 for lodging and $68 for meals and incidental expenses. It applies to any location without its own listed rate.

Which rate applies to a trip that starts in September and ends in October?

If your policy adopts the new GSA rates on October 1, apply the relevant schedule to each travel date. A single report can contain both FY2026 and FY2027 rates. Private employers should also confirm applicable IRS transition rules.

Are private employers required to use GSA per diem rates?

No. GSA rates govern federal travel reimbursement; they do not automatically set every private employer's policy. Employers should check applicable reimbursement obligations, tax rules, and contractual requirements.

Is per diem taxable?

Per diem is not automatically tax-free. Treatment depends on the allowance and whether accountable-plan requirements are met, including substantiating the travel. A per diem allowance above the applicable federal rate generally creates a taxable excess. Learn more at IRS Publication 463.

Get Ahead of October 1

GSA per diem rates for FY2027 are officially finalized, and the October 1 effective date is right around the corner. The teams that reimburse correctly on October 2 are the ones whose rate tables update in one place instead of four.

Still working out what belongs in your policy? Understanding Per Diems: A Win-Win for Companies and Employees covers the components that need to be in writing before rates change.

Ready to see how effective-dated per diem tables apply the correct rate to every trip that crosses the fiscal year boundary, with no manual recalculation?