Understanding Per Diem Allowance
Per diem, or daily allowance, is the allowance given to an employee who is on an official tour in connection with the company's business and/or who is on a non-residential training program and is nominated by their company. This allowance reasonably covers their food, tea, and snack expenses.
Factors Influencing Per Diem Rates
The fixation of per diem or daily allowance depends on the HR travel policy, which varies from company to company. This also varies from place to place; the per diem or daily allowance applicable for metro cities is different from that applicable for non-metro cities.
Classifying Cities for Per Diem Rates
Hence, you may start by classifying cities in India (like A-Class cities, B-Class cities, C-Class cities) and fix the DA/per diem, which takes care of the reasonable daily expenses of a person.