Per diem rates are the government’s published benchmarks for daily lodging and meal costs in every city in the United States. For travel nurses, they serve a dual purpose: they set the ceiling on how much your agency can pay you in non-taxable stipends, and they give you a concrete number to negotiate against. Most nurses sign contracts without ever checking whether their stipend is above, below, or at the GSA rate for their assignment city.
The General Services Administration publishes updated rates each October for the new fiscal year. FY2026 rates (effective October 1, 2025) apply to most assignments running through September 2026. The standard rate for cities not specifically listed is $110/night for lodging and $68/day for meals and incidental expenses. High-cost cities like San Francisco, New York, and Honolulu have significantly higher rates — up to $329/night for lodging in some markets.
Lodging vs. M&IE: Two Separate Buckets
Per diem is split into two distinct components, and understanding both is important when reviewing your contract. The lodging rate is a nightly amount that covers the cost of a hotel or temporary housing. The M&IE rate — Meals and Incidental Expenses — covers daily food costs plus small incidentals like laundry and tips. The IRS and GSA treat these separately, and agencies often quote them separately on contracts as well.
For most travel nursing contracts, you will see a monthly housing stipend (which converts from the nightly lodging rate) and a separate daily meal allowance. A city with a $150/night lodging rate and a $79/day M&IE rate translates to a $4,500/month housing stipend and roughly $2,370/month in meal allowance for a 30-day month — at the GSA maximum. Your agency may pay less, and that gap is money you are leaving on the table.
The IRS Safe Harbor: Why the GSA Rate Is the Ceiling
Under IRS Revenue Procedure 2019-48, employers can pay per diem at or below the GSA rate without requiring employees to substantiate their actual expenses. This is the safe harbor that makes the GSA rate so important in travel nursing. As long as your agency pays at or below the published GSA rate for your city, those payments are presumptively tax-free and require no receipts.
When an agency pays stipends above the GSA rate, the excess becomes taxable wages. Agencies occasionally do this intentionally to structure contracts with inflated stipends and a low taxable hourly rate — a practice that shifts tax risk to the nurse and can attract IRS scrutiny. A contract with a $25/hour taxable rate and a $3,000/month housing stipend in a city where the GSA lodging rate translates to $2,400/month has $600/month in stipends that should technically be taxable wages.
How to Find Your City's GSA Rate
The GSA posts all FY2026 per diem rates at gsa.gov/travel/plan-book/per-diem-rates. You can search by state and city. If your assignment city is not listed specifically, it falls under the standard rate ($110 lodging/$68 M&IE). Many major assignment markets — Los Angeles, Seattle, Boston, Chicago — have their own higher rates that substantially change the calculation.
Rather than doing this lookup manually, you can enter your assignment city and state into our Per Diem Checker and instantly see the FY2026 GSA rates for lodging and M&IE, plus how your agency's offer compares — all in about 30 seconds.
A Concrete Example: San Francisco vs. Standard Rate
Suppose you have two offers — one in Sacramento and one in San Francisco, both quoting a $2,500/month housing stipend. The standard GSA lodging rate for Sacramento is $110/night ($3,300/month equivalent), so Sacramento's $2,500 is well under the safe harbor. In San Francisco, the FY2026 lodging rate is $329/night ($9,870/month equivalent), so the $2,500 stipend is dramatically below what the IRS would allow tax-free. In San Francisco, you have significant room to negotiate a higher housing stipend without either party crossing the taxable threshold.
Frequently Asked Questions
Can my agency pay above the GSA rate tax-free?
No. Any per diem amount above the published GSA rate is taxable compensation under the IRS accountable plan rules. Some agencies do pay above the rate — but the excess is supposed to appear on your W2 as wages. If your agency pays above the GSA rate and does not include the excess in your W2, that is a compliance issue that could come back to you in an audit.
Do GSA rates apply to both W2 and 1099 nurses?
For W2 nurses, the employer pays stipends under the accountable plan rules and GSA rates determine the non-taxable ceiling. For 1099 nurses, the mechanics are different — you deduct actual business expenses on Schedule C rather than receiving non-taxable stipends. The GSA rate can still be used as a safe harbor for the meals and incidental expenses deduction under IRS Rev. Proc. 2019-48, but the overall tax treatment differs meaningfully from W2.
What happens if the GSA rate for my city is lower than my actual housing cost?
In high-cost cities, the GSA lodging rate sometimes falls well below what housing actually costs. That gap is not covered by tax-free stipends — you pay the difference out of your taxable wages. This is one reason nurses who accept assignments in very expensive markets often end up with lower effective net pay than nurses in moderately priced cities despite higher gross offers. Always factor actual housing costs into your comparison.
How often do GSA rates change?
GSA updates per diem rates annually, effective October 1 each year for the new fiscal year. If your contract crosses a fiscal year boundary (for example, an assignment starting in August and running through November), the rate in effect when each day of the assignment occurs applies. Most agencies lock the rate at the contract start date, so confirm which rate your contract uses for multi-month assignments that span October.
Disclaimer: Per diem rates and tax rules are subject to change. This article reflects FY2026 GSA rates and IRS guidance current as of June 2026. Consult a tax professional for advice specific to your contract and filing situation.