Per Diem Chicago Rates: A 2025 Guide for Small Businesses

If you’re a small business owner or employee planning a business trip to Illinois, you’re probably wondering about the per diem Chicago rates so that you can properly manage expenses. Using per diem rates, employees can budget effectively for travel and employers can avoid time-consuming expense reimbursements. 

Let’s break down what per diem Chicago rates are for 2025 and how to apply them to your business travel.

What is per diem for Chicago?

Per diem refers to a daily allowance for business travel expenses. It covers meals, lodging, and incidental expenses, making it easier for employees to manage your travel budget without keeping detailed receipts for every expense. Make sure to distinguish between per diem expenses and travel time pay. 

The U.S. General Services Administration (GSA) sets standard per diem rates, ensuring they align with the cost of living in various locations. In Chicago, per diem rates vary depending on the time of year and specific location within the city. This variability ensures that the allowance reflects the actual cost of staying in different parts of Chicago. 

For instance, rates may be higher during peak tourist seasons or in more expensive neighborhoods. Understanding the per diem rates for Chicago helps with planning business trips more effectively. By knowing the daily allowance, employees can choose accommodations and dining options that fit within the budget, ensuring a smooth and hassle-free business trip. 

How does per diem work in Chicago?

The way Chicago per diem works is similar to per diem rates everywhere else, especially cities such as in San Diego or Denver. The precise number changes depending on the time of year and with each year, so per diem rates for 2024 differ from rates in 2025. Additionally, rates in cities and other non-standard areas (NSAs) like Chicago are different from the average per diem rate of the home state. 

No matter what, the rates are subdivided between the following expense types: 

Lodging per diem rate.

The lodging per diem rate covers the cost of a hotel or other accommodations while an employee is on a business trip in Chicago. This rate varies depending on the time of year and specific location within the city. For example, staying in downtown Chicago may have a different rate compared to staying in the outskirts. 

Meals and incidental expenses (M&IE) per diem rate.

The M&IE per diem rate covers the cost of meals and incidental expenses during a business trip. This includes breakfast, lunch, dinner, and any small expenses such as tips or snacks. The rate ensures employees can dine at reasonable establishments without needing to track every meal receipt. Like the lodging rate, the M&IE rate can vary based on the location within Chicago and the time of year. 

Combined per diem rate.

The combined per diem rate includes both the lodging and M&IE rates, providing a comprehensive daily allowance for business travel expenses. This combined rate simplifies the budgeting process by providing a single daily amount to cover all travel needs.

What is the per diem rate in Chicago?

The per diem rate in Chicago is different from the per diem rates elsewhere in Illinois, and new rates are released annually. Because fiscal years are not January - December, it’s still important to know Chicago per diem for 2024. For the 2025 fiscal year, which began in October 2024 and extends until September 2025, the per diem rates are as following: 

Lodging rate for Chicago in 2024-25. 

• October 2024 - November 2024: $223
• December 2024 - March 2025: $142
• April 2025 - June 2025: $234
• July 2025 & August 2025: $202
• September 2025: $223

M&IE rate for Chicago in 2024-25. 

• M&IE total: $92
• Breakfast: $23
• Lunch: $26
• Dinner: $38
• Incidental expenses: $5
• First and last day of travel: $69.00

How to calculate per diem rates for Chicago in 2025.

Knowing the rates is one thing, but applying the per diem rates to an example is crucial for ensuring your future calculations are correct. Here’s an example of how to calculate per diem hourly rate for a 5-day, 4-night trip in Chicago. 

1. Determine the applicable rates.

Use the above numbers and double check them against the GSA website to find the most recent rates for lodging and meals and incidental expenses (M&IE). ‍

2. Calculate total per diem.

Once you have the applicable rates, calculating your total per diem is simple. Multiply the daily lodging rate by the number of nights you will stay. Do the same for the M&IE rate, multiplying it by the number of days you will be traveling. Add these two amounts together to get your total per diem. 

For example, if we use the 2024 per diem rates and the lodging rate is $223 per night while the M&IE rate is $92 per day, and you are traveling for five days and four nights, your calculation would look like this:

• Lodging: $223 x 4 nights = $892
• M&IE: $92 x 5 days = $460
• Total Per Diem: $892 + $460 = $1352‍

3. Adjust for first and last days of travel.

The GSA guidelines specify that the first and last days of travel are reimbursed at 75% of the M&IE rate. This adjustment accounts for partial travel days when you might not incur a full day's worth of expenses. Conveniently, the GSA provides the first and last day amount. 

If your trip spans five days, with the first and last days being partial travel days, your total M&IE calculation would be:

• First Day: $69.00
• Last Day: $69.00
• Full Days: $92 x 3 days = $276
• Total M&IE: $69.00 + 69.00 + $276 = $414

Add this adjusted M&IE total to your lodging costs to get the final per diem amount. In this case:

• Lodging: $892
• Adjusted M&IE: $414
• Total Per Diem: $892 + $414 = $1306

By following these steps, you can accurately calculate your per diem for a trip to Chicago, ensuring you stay within budget and receive proper reimbursement.

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Tips for Maximizing Your Per Diem in Chicago

There are a lot of good reasons why employers and employees both want to stick to a per diem rate when traveling for work. Employees don’t want to pay out-of-pocket, and employers want to be able to budget correctly for work travel. These are some tips to reduce expenses on a business trip:

• Budget using per diem rates. Using the number of days an employee will be traveling to calculate a per diem budget provides a clear understanding ahead of time of how much can be spent daily on lodging, meals, and incidental expenses. 
• Choose accommodations wisely. When selecting a hotel in Chicago, focus on finding competitive rates and amenities. Look for accommodations that offer discounts for extended stays or corporate rates. Consider the location of the hotel as well; staying in a central area might reduce transportation expenses and save time commuting to meetings or events. 
• Plan affordable meals. Research affordable dining options near the destination. Chicago boasts a variety of eateries, from budget-friendly diners to upscale restaurants. Use apps and websites to find deals, happy hours, and specials. Consider eating at local markets or food trucks for a taste of Chicago's diverse culinary scene without breaking the bank.
• Take advantage of hotel amenities. Many hotels provide complimentary breakfast, which can save the cost of one meal each day. Use the fitness center to avoid paying for a gym membership during a stay. If the hotel has a kitchenette, consider buying groceries and preparing simple meals. This approach can significantly reduce dining expenses and allow allocation of the per diem to other needs.
• Use public transportation. Chicago's public transportation system is extensive and reliable, making it a cost-effective way to get around the city. Use buses and trains to save on transportation costs compared to taxis or ride-sharing services. Purchase a transit pass for unlimited rides within a specific period, which can be more economical than buying single tickets. 
• Keep detailed records. Properly recording expenses is important for accurate reimbursement. Employees should save all receipts related to meals, lodging, and incidental expenses and employers should require these records to be provided in an expense report to avoid discrepancies during the reimbursement process. 

Prepare payroll per diem with Homebase. 

Small business owners have plenty to think about without needing to pay out manually calculated travel reimbursements as well. But a good business owner also knows the importance of compensating employees promptly and fairly. 

That’s why Homebase payroll was created with small business owners in mind. Our all-in-one app for hourly teams automates payment processing while ensuring compliance with local laws. You can even communicate with your team using our app to stay up-to-date on any unexpected expenses, so you can focus your time on growing your business, not crunching numbers. 

With Homebase, you can streamline your payroll and provide accurate compensation for travel costs. Sign up to simplify payroll with Homebase now.