Determining Per Diem Rates for Business Travel: How Do You Handle It?

Hello all,

Our Director traveled to Germany from September 11th to September 27th on a Business Visa for business purposes. I want to know how to determine the Per Diem rate.

The per diem rate for overseas travel has to be based on the company policy. Of course, this has to be in line with the RBI Guidelines. To know the RBI limits, please click on the following link to see the relevant circular: https://rbi.org.in/scripts/FAQView.aspx?Id=66.

Company Policy for Per Diem Rates

Ideally, as a company policy, you must frame per diem limits for such overseas travel based on the grades of the employees traveling, the purpose of travel, duration of travel, frequency of travel, countries to be visited, and the cost of living there, etc. Even the authorization/approval of such overseas visits must also be specified. Having specific formats for such travel approval would also help streamline the request, approval, and release of foreign exchange.

Trust the above input meets your immediate requirements.

Regards

Thank you so much. I would also like to know what the rate of conversion should be when accounting for the expenses made by an employee abroad. For example, if the employee was already paid in Euros before leaving the country, should the same Euro rate be used throughout their travel?

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Thank you for the message. Let me know if you need any further assistance.

Since the Euro was given to the employee/director before he left, you have the rupee rate at which the Euro was purchased. Similarly, when he comes back and returns any Euros, the equivalent rupee conversion rate would be relevant. The expenses would be booked at the equivalent rate at which the currency was purchased. If credit cards are used overseas, the equivalent conversion in Indian Rupees would be reflected in the credit card statements, and that would be the relevant amount to be booked in the accounts.

Trust the reply answers your query.

Regards

Thank you.

Is it necessary for the employee to submit all the bills even if the company has decided on the Per Diem? If he does not submit a few bills because he may have lost a few, can we still reimburse him? Can't per diem approval be enough for reimbursement? Also, can you please suggest an ideal per diem for Germany and Vietnam separately?

Sorry to disturb you again, but please help. Once again, thank you.

Bills have to be submitted for any reimbursement, especially since this involves Forex. Are you assuming that this Director will lose some bills, or is this the scenario for resolution? Being a Director, he ought to have taken care of such minor but crucial aspects of any official travel, be it overseas or domestic.

Per Diem Rates and RBI Guidelines

Coming to your query about the per diem rates for different countries, Jacob has already given you the RBI guidelines. It can be anything, but you have to conform to these RBI norms.

Please find below the links (you can get more by googling if you wish to) for the Cost-of-Living Comparisons around the world. You can arrive at the rates depending on your company's financial situation and RBI norms.

Cost of Living Resources

- Cost of Living Comparison Between Two Countries
- Map Shows Cost of Living Around the World

Though these are actually meant for those wishing to relocate, the info can also be used for your purpose.

Regards,
TS