Per diem is a daily allowance or payment made to an employee to cover their expenses while traveling or working away from home. Per diem is typically used to cover the cost of meals, lodging, and other incidentals while on business travel.

Per diem is typically paid in addition to an employee's regular salary or wages, and it is intended to help cover the additional costs of being away from home. Per diem rates are often set by the government or by the employer and may vary based on the location of the business travel.

Per diem payments are generally tax-free, as long as they are used to cover business-related expenses. However, employees may be required to provide receipts or other documentation to support their per diem expenses.

Per diem is often used by organizations that have employees who travel frequently or who work at multiple locations, as it can help to simplify the process of reimbursing employees for their travel-related expenses.