What changed for travel therapists on October 1, 2026

From October 1, 2026, IRS Notice 2026-60 puts the FY2027 high-low per diem rates at $329 a day for high-cost localities and $230 a day for every other locality in the continental United States, and GSA’s FY2027 standard rate of $113 a night for lodging and $68 a day for meals and incidentals is in effect. Which of those figures a stipend is measured against still turns on one rule in IRS Publication 463: the rate for the locality where you stop for sleep or rest.

By ProTherapy Staffing, published October 25, 2026.

What are the FY2027 high-low per diem rates?

The high-low method is one of the ways an employer can figure the federal per diem rate. IRS Publication 463 calls it “a simplified method of figuring the federal per diem rate for travel within the continental United States.” Instead of a rate for every city, there are two.

IRS Notice 2026-60 sets them for FY2027. In its words, the rates “are $329 for travel to any high-cost locality and $230 for travel to any other locality within CONUS.” The part of each that is “treated as paid for meals” is “$86 for travel to any high-cost locality and $74 for travel to any other locality within CONUS.” An employer that pays only for meals and incidentals under the same method uses $86 and $74, and the Notice puts the incidental expenses only rate at “$5 per day.”

The Notice covers allowances “paid to any employee on or after October 1, 2026, for travel away from home on or after October 1, 2026,” and says Notice 2025-54 “is superseded.” For comparison, Publication 463 gives the rates in effect from October 1, 2025 as $319 for high-cost locations and $225 for all other locations, with the same $86 and $74 for M&IE.

Which places are high-cost localities for FY2027?

Section 5 of the Notice lists them by key city, county and the part of the calendar year each one counts. They are the localities that “have a federal per diem rate of $280 or more.” Some count all year. Others count for a season: Gulf Shores, Alabama from June 1 to July 31, and Mammoth Lakes, California from December 1 to March 31.

The list moved this year. The Notice says Tucson, Arizona; San Mateo/Foster City/Belmont, California; Albuquerque, New Mexico; and Cody, Wyoming “have been added,” that Panama City, Florida “has been removed,” and that fifteen others changed the part of the year in which they count.

Under this method, a contract in a county that is not on the list uses $230 whatever that county’s own GSA rate is, and a contract in a listed county uses $329 only for the months the Notice names.

What is the FY2027 standard CONUS rate?

The other set of figures comes from the General Services Administration, which publishes a per diem rate for each locality on its per diem rates pages. GSA’s FY 2027 highlights say: “The standard rate of $181 ($113 lodging, $68 M&IE) applies to most of CONUS.” The same page says “The standard CONUS lodging rate increased from $110 to $113” and that the M&IE tiers “were not revised for FY 2027,” so they still run from $68 to $92 a day.

For FY2027, GSA counts 295 non-standard areas with rates above the standard rate. Publication 463 explains the date: per diem rates “are listed by the federal government’s fiscal year, which runs from October 1 to September 30.”

Which rate applies where you sleep on a contract?

Publication 463 answers it in one line: “For per diem amounts, use the rate in effect for the locality where you stop for sleep or rest.”

In plain words, the rate follows the place you sleep, not the facility’s address, the agency’s office or your tax home. If the hospital sits in a listed city but your rental is in a neighboring county with no rate of its own, the rate for those nights is the standard rate. Under the high-low method the same test decides whether the high-cost list applies.

If you want an offer’s stipend lines set against the FY2027 rate for the county where you will sleep, ask a ProTherapy recruiter: Find my next contract.

What does the change mean for a stipend’s math?

The method did not change; the inputs did. A weekly housing stipend is measured against the lodging rate for each night, and a weekly meals stipend against the M&IE rate for each day. Publication 463 lists the regular federal per diem rate and the high-low rate among the ways to figure the federal rate, so the first two facts about an FY2027 offer are the method and the locality.

The federal rate is where the tax line falls. Publication 463: “If your allowance is less than or equal to the federal rate, the allowance won’t be included in box 1 of your Form W-2.” Above it, “the excess allowance will be included in box 1 of your Form W-2.” In a county on the standard rate, the FY2027 inputs are $113 a night and $68 a day; under the high-low method they are $230 a day, or $329 in a listed county during its months. A step-by-step check of an offer is on how to check a stipend offer against the FY2027 rates.

Does a contract that started in September switch to the new rates?

Not necessarily on October 1. Publication 463’s transition period covers “the last 3 months of the calendar year,” and “During this period, you may generally change to the new rates or finish out the year with the rates you had been using.” For the high-low method it adds that “you must continue using the high-low method for the rest of the calendar year (through December 31).” Notice 2026-60 points to transition rules for the last three months of 2026 as well.

So an offer written in September and a contract that runs into the new year can rest on different figures. Ask which fiscal year’s rates each stipend line uses, and whether that changes after December 31.

Frequently asked questions

Did the meals part of the high-low rate change on October 1, 2026?

No. Notice 2026-60 treats $86 of the high rate and $74 of the low rate as paid for meals, and Publication 463 lists the same $86 and $74 for M&IE in the rates that took effect October 1, 2025. The totals rose to $329 and $230.

Is the high-low rate the same as the GSA rate for my city?

No. GSA sets a rate for each locality, with the FY2027 standard rate of $113 for lodging and $68 for M&IE where no other rate is listed. The high-low method uses two rates instead: $329 in a listed high-cost locality during its months and $230 everywhere else.

Where can I see whether my contract county is a high-cost locality?

In section 5 of IRS Notice 2026-60, which lists each high-cost locality by key city, county and the part of the calendar year it counts. The list holds the localities with a federal per diem rate of $280 or more.

Sources

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