A small company that reimburses employee travel under the IRS high-low method will get new numbers on October 1. For travel to a qualifying high-cost locality, the federal high-low per diem rises to $329 a day. For other locations in the continental United States, it rises to $230.

The current rates are $319 and $225, so the increase is $10 for high-cost locations and $5 elsewhere. The meal-and-incidental-expense portions do not rise: they remain $86 in high-cost localities and $74 in other continental U.S. locations. The increase is therefore in the lodging component of the combined allowance.

IRS Notice 2026-60 applies to qualifying travel on or after October 1, 2026, and supersedes Notice 2025-54.

The high-low method is an employer reimbursement shortcut

The high-low method replaces a city-by-city per diem lookup with two rates. Under Revenue Procedure 2019-48, a payor can use those rates to substantiate lodging, meals and incidental expenses paid to an employee traveling away from home for business, subject to the rest of the accountable-plan and substantiation rules.

A sole proprietor taking a business trip should not simply multiply travel days by $329 or $230 and treat that as a Schedule C travel deduction. IRS Publication 463 says self-employed taxpayers can use the standard meal allowance for qualifying meals, but there is no optional standard lodging amount comparable to the meal allowance; lodging generally follows actual cost. Revenue Procedure 2019-48 also says employees and self-employed individuals cannot use the high-low method as a substitute for their own meal-and-incidental-expense deduction method.

October creates a choice of rate schedules, not a free choice of methods

If an employer used the high-low method for an employee during the first nine months of 2026, Revenue Procedure 2019-48 generally requires that method to continue for that employee for the rest of the calendar year. The employer cannot switch methods just because the new annual notice arrived.

For October through December, however, a payor already using high-low may use either the rates and high-cost locality list that applied during the first nine months of the year or the newly issued schedule. Whichever schedule the employer chooses must be used consistently for all employees reimbursed under the high-low method during that period.

For a hypothetical four-day trip to a high-cost locality, the new $329 rate produces $1,316 of per diem. The prior $319 rate produces $1,276. The $40 difference may matter less than making sure payroll and expense systems apply one schedule consistently.

The map changed, too

Notice 2026-60 adds Tucson, Arizona; San Mateo/Foster City/Belmont, California; Albuquerque, New Mexico; and Cody, Wyoming to the high-cost list. Panama City, Florida, was removed.

Several other places remain on the list but have different high-cost seasons, including Napa, South Lake Tahoe and Yosemite National Park in California; Aspen, Steamboat Springs and Telluride in Colorado; Fort Myers, Florida; Falmouth, Massachusetts; Toms River, New Jersey; New York City; Philadelphia; Hilton Head, South Carolina; Manchester and Montpelier, Vermont; and Port Angeles/Port Townsend, Washington. Sun Valley/Ketchum, Idaho, received a correction.

A stale travel-policy spreadsheet can therefore be wrong even if it remembers last year's dollar amounts correctly.

Some rates stayed put

The special meals-and-incidental-expense rate for transportation-industry taxpayers remains $80 a day for travel within the continental United States and $86 for travel outside it. The incidental-expenses-only rate remains $5 per day.

Before the first October trip, pull the written travel policy and one recent expense report. Confirm the method used from January through September, check whether the destination is high-cost for the month of travel, and verify whether payroll or expense software will keep the old schedule or adopt the new one for October through December.

Sources

Primary sources, last checked Sep. 29, 2026:
IRS Notice 2026-60 — 2026-2027 Special Per Diem Rates
IRS Notice 2025-54 — 2025-2026 Special Per Diem Rates
IRS Revenue Procedure 2019-48 — Per Diem Substantiation Rules
IRS Publication 463 (2025) — Travel, Gift, and Car Expenses