Travel Stipends - What Are They & What Are The Requirements?

*I am NOT an Accountant - PLEASE SEEK THE ADVICE OF A PROFESSIONAL!*

A travel stipend (AKA Per Diem) is a fixed sum of money given by an employer to an employee to cover travel-related expenses, such as lodging, meals, and transportation. These are offered for work-related business travel under an accountable plan, making them tax-free to a point.  

The IRS distinguishes between accountable and non-accountable plans to determine the tax treatment of employee travel stipends. For a stipend to be non-taxable, it must be part of an accountable plan that follows specific rules for business connection, substantiation, and returning excess funds. 

Accountable plan (non-taxable)

To be considered an accountable plan, the stipend or reimbursement must satisfy three requirements: 

• Business connection: The expense must be incurred for a legitimate business purpose while the employee is performing their job.
• Substantiation: The employee must provide proof of the expenses, such as receipts, detailing the amount, time, place, and business purpose, within a reasonable period of time (e.g., 60–120 days).
• Return of excess funds: The employee must return any stipend amount that exceeds their substantiated expenses within a reasonable period. 

If a plan satisfies these criteria, the travel stipends or reimbursements are not considered taxable wages to the employee and do not need to be reported on their W-2. 

Non-accountable plan (taxable)

If a stipend or reimbursement arrangement fails to meet any of the three rules for an accountable plan, it is treated as a non-accountable plan. 

• Taxable wages: Payments under a non-accountable plan are considered taxable wages, subject to income tax withholding, Social Security, and Medicare taxes.
• W-2 reporting: The company must include the travel stipend amount in the employee's gross income on their W-2 form.
• No expense reporting: The company does not require employees to report how they spend the money or return any unused portion. 

The IRS Guidelines for Travel Stipends for Private Employees

Accountable Plan Required

• Reimbursements or stipends must be under an accountable plan to be non-taxable
• Employees must document expenses and return any excess

Covered Expenses

• Business-related travel
• Eligible expenses include:  Lodging, Meals and incidentals like tips/parking/tolls etc.

Per Diem Limits

• IRS allows reimbursement up to federal per diem rates for location
• Standard Continental US rate is $178/day ($110 for lodging and $68 for meals & incidentals)
• High Cost Localities like some areas in California, New York and a few others can be as high as $319/day

Substantiation

• Employees must provide receipts or expense reports
• Any reimbursement over specified rates may be taxable

Non-Taxable if Rules Followed

• Within per diem (specified) limits
• Proper documentation is submitted
• Excess is returned

Taxes apply if

• Paid as a flat stipend and not tied to actual expenses
• Exceeds per diem (specified) rates
• No receipts or documentation provided

Sources:  Many companies use the GSA Rates to simplify travel reimbursements/stipends.  The GSA Rates help to ensure that the stipends are non-taxable under the IRS rules if structured as an accountable plan.  You can review the standard rates for the city you're traveling to on the GSA site here: 

https://www.gsa.gov/travel/plan-book/per-diem-rates?gsaredirect=perdiem

If you're a whiz at taxation laws and you don't break out into a cold sweat when tax time comes around, you're probably in the clear, but if any of the above information seems new to you or even a bit confusing its always best to consult a professional. 

Recruiter / Candidate Respect Should Be a 2-Way Street

More and more often recruiters are getting a bad rap. Every day on social media I read sad accounts from people who are looking for work who have been ghosted by a recruiter, they walk away feeling like they didn't matter and that should never happen.

I’m not here to make excuses for how other recruiters conduct their business — that’s not my job. What I am here to do is share some honest thoughts about how recruiters are often treated by the very candidates we aim to support.

I've built my career on a simple principle: treat every candidate the way I’d want to be treated if I were the one looking for a job. To me, this means each person deserves respect, transparency, and consistent communication. Every person I speak to matters — not because of commissions or quotas, but because they’re a human being navigating one of life’s more stressful challenges: finding meaningful work.

Of course, I’m not perfect. There have been times when I’ve unintentionally missed an update or had to deliver bad news I couldn’t control. I own mistakes I've made, apologize and strive to do better.

What can be disheartening is how often recruiters are dismissed or treated as mere gatekeepers — the “middlemen” who are easy to overlook or blame. But here’s the truth: in most organizations, recruiters play a pivotal role. We’re trusted partners, working closely with leadership to find and recommend top talent, as well as play a part in the decision-making process. A strong relationship with a recruiter can open doors — and burning that bridge can be a costly mistake.

Over the years I've been fortunate to speak with thousands of lovely people from various walks of life for a multitude of different positions, and many of those have turned into lasting professional relationships or friendships.  And yet, I’ve also experienced the sting of being completely ignored after the person lands the job - no reply to a check-in email, no quick “Thanks, I’m loving it!” — just silence. I've also listened to people scream obscenities at me over the phone when I've had to tell them they aren't qualified for the position or the manager has decided to offer the role to someone else, and I've received some scathing emails as well.

Now, I’m not looking for a parade of endless praise  - just a simple "thank you" and basic kindness goes a long way. While I may not be the one signing the paycheck, I genuinely care about your success — and I never stop rooting for the people I've worked with.

In the end, it all comes down to mutual respect. Just as you want a recruiter who sees you as more than  a resume and a potential commission check, we hope to be seen as more than just a stepping stone.

The opinions expressed in this blog do not represent that of my employer.  Copyright - content cannot be used without the expressed permission of the author