What should a construction or field service company look for in T&E software?
On job sites the tax rules on per diem and the cost of getting it wrong set the policy. Five things matter.
| What you need | Why | In ExpenseOS |
|---|---|---|
| Per diem that stays tax-free | Per diem is tax-free only up to the federal rate, for nights away from the tax home, on a job realistically expected to last a year or less (IRS Publication 463). | Per diem at GSA rates, with the first and last days at 75%.Soon |
| Lodging near the job | Extended-stay hotels averaged $123.31 a night in the first quarter of 2026 (CoStar), and the federal standard lodging rate is $113 from 1 October 2026 (GSA). | Hotel caps follow each city's market rate, and the pack sets extended-stay rates for jobs over a week. |
| Mileage at the rate in force | The IRS business rate was 72.5¢ a mile for January to June 2026 and 76¢ from 1 July 2026. | Mileage is worked out from the addresses, at your company's rate. |
| Trucks, fuel and tools on the job | A tool allowance paid without receipts is wages (Rev. Rul. 2005-52), and required safety gear is the employer's cost (OSHA, 29 CFR 1926.95). | The pack allows rental trucks and fuel for site work and tools up to $1,000 against receipts, and covers required safety gear with no limit. |
| Answers from the job site | A crew can't wait until the office opens to know whether a motel is in policy. | Ask in the chat on the phone, typed or spoken, and get the answer with the rule named. |
The rules that apply to field services and construction
What each rule requires, and what it means for a travel and expense policy.
| Rule | What it requires | What it means for your policy |
|---|---|---|
| Tax home and temporary work, IRS Publication 463 | Travel is deductible only away from the tax home. A job realistically expected to last more than a year is indefinite, and its location becomes the tax home; itinerant workers have no tax home. Travel meals need an overnight stop for sleep or rest. | Track each job's expected length; per diem past a year goes through payroll. |
| Per diem substantiation, Rev. Proc. 2019-48 | A per diem counts as substantiated only up to the federal rate for the place; anything above it is taxable pay. On the first and last days of travel the meals rate is prorated, at 75% under the federal travel rules. | Cap a per diem at the federal rate for the destination. |
| Wage recharacterization, Rev. Rul. 2012-25 | An arrangement that pays the same amount whether or not business expenses are incurred turns reimbursements into wages. | Pay per diem for travel, not as part of pay. |
| GSA per diem rates, FY2027 | From 1 October 2026: $113 a night for lodging and $68 a day for meals and incidentals in most of the continental US, with higher rates in 295 areas and meal rates from $68 to $92. | The federal rate for the destination sets the tax-free ceiling, and the limit on federally billed travel. |
| IRS high-low method, Notice 2026-60 | From 1 October 2026: $329 a day in high-cost places and $230 elsewhere, of which $86 and $74 are meals and incidentals. | A simpler alternative to city-by-city rates. |
| IRS business mileage rate, 2026 | 72.5¢ a mile from 1 January to 30 June 2026, and 76¢ a mile from 1 July 2026 (Announcement 2026-11), raised midyear for fuel costs. | Use the rate in force on the day of each drive. |
| OSHA 29 CFR 1926.95(d) and 1910.132(h) | Required personal protective equipment is provided at no cost to employees, with exceptions such as non-specialty safety-toe boots and prescription safety glasses workers may wear off the site. Replacements are the employer's cost unless the worker lost the gear or damaged it on purpose. | Pay for required safety gear; never deduct it from the worker. |
| Tool allowances, Rev. Rul. 2005-52 | A tool allowance that doesn't require substantiation and the return of any excess isn't paid under an accountable plan, so it is wages. | Reimburse tools against receipts. |
| California prevailing wage, travel and subsistence | California publishes travel and subsistence provisions with its prevailing wage determinations, for example $80 a day subsistence for Operating Engineers on remote San Diego County projects, or $30 when the employer provides the room. | On public works, check the job's own provisions. |
2026 market benchmarks for field services and construction
Published figures to measure a travel and expense policy against.
| Benchmark | Figure | Source |
|---|---|---|
| Extended-stay hotel average daily rate, Q1 2026 | $123.31 a night | CoStar, in Hotel Business's extended-stay report |
| Federal per diem, FY2027 standard | $113 lodging, $68 meals and incidentals | GSA |
| Federal meals and incidentals, FY2027 | $68 to $92 a day, 75% on the first and last days | GSA |
| IRS high-low per diem, from 1 Oct 2026 | $329 high-cost, $230 elsewhere | IRS Notice 2026-60 |
| IRS business mileage, from 1 Jul 2026 | 76¢ a mile (72.5¢ before) | IRS Announcement 2026-11 |
| Union subsistence on outside-line calls, Aug 2026 | $50 a day on most calls, some $100 | IBEW Local 1245 |
The field services and construction policy pack
On day one, a company starts from the pack for its industry. This one is for contractors, crews and technicians on job sites: trucks, tools and long stays near the site, with lean flights. Each category starts with a limit and a rule.
Airfare$900 a round tripEconomy at the lowest logical fare, 7 days ahead when you can.
LodgingMarket rateEach city's market rate this week with no margin above it, or $175 a night where there's no market data, and extended-stay rates for jobs over a week. The itemized hotel bill for every stay.
Ground transport$150 a tripRental trucks and fuel for site work. Company trucks fuel on the fuel card; your own vehicle claims mileage, never fuel.
Meals$68 a dayWhat you spend on nights away, up to the federal standard meals rate, with receipts at $25.
Client meals$75 a personMeals with site owners and general contractors: each guest and the business reason, never billed to the owner or general contractor.
Events and ticketsNo limitA manager approves it first. Coded apart from meals, because entertainment isn't deductible.
Gifts$25 a person a yearThe most that's tax-deductible. Name who gets it.
Software$100 a monthThe company's field apps first. A manager approves any charge over $250, a year's plan included.
Tools$1,000 an itemReimbursed against receipts, because a flat tool allowance is wages. Buy from the company's field suppliers; phones and tablets go through IT.
Safety gearNo limitRequired safety gear is always covered, and replaced unless it's lost or damaged on purpose. Safety boots up to $200 a year.
Per diemSoonGSA rateThe pack's choice for crews: a flat daily rate for each night away at the GSA meals rate for the job site, 75% on the days you leave and return, with no meal receipts. Tax-free only on jobs expected to last a year or less.
Client travelPer clientA starting policy for owners and general contractors who pay for travel: the lowest available fare up to $900 and meals at $68 a day, with receipts at $75.
Every line is a starting point. Admins change limits on screen or in a sentence, and ExpenseOS shows every change it would make before anything applies. From then on, every request is answered against the policy before the money moves, with the rule named, and anything out of policy goes to a person with the reason.
Questions contractors and field service teams ask
What should a construction or field service company look for in T&E software?
Answers crews can get from the job site, per diem that stays inside the IRS rules, lodging caps that fit where the jobs are, mileage at the rate in force on the day, and tools and fuel bought on the job without a desk sign-off. ExpenseOS starts field companies from a policy pack built for crews and answers every request before the money moves, with the rule named.
When is per diem for construction crews tax-free?
When it is paid under an accountable plan, for nights away from the tax home, on a job realistically expected to last a year or less, and up to the federal rate for the place (IRS Publication 463 and Rev. Proc. 2019-48). Anything above the federal rate is taxable pay, and an amount paid whether or not someone travels is wages (Rev. Rul. 2012-25).
What are the federal per diem rates from 1 October 2026?
The standard GSA rate is $113 a night for lodging and $68 a day for meals and incidentals, $181 in all, with higher rates in 295 areas and 75% on the first and last days of travel. The IRS high-low alternative is $329 a day in high-cost places and $230 elsewhere (Notice 2026-60).
What is the IRS mileage rate for 2026?
72.5¢ a mile for business driving from 1 January to 30 June 2026, and 76¢ a mile from 1 July 2026, when the IRS raised it midyear because of fuel costs. Use the rate in force on the day of each drive.
Who pays for safety gear and tools?
The employer pays for required personal protective equipment, with narrow exceptions such as non-specialty safety-toe boots and prescription safety glasses (OSHA, 29 CFR 1926.95 and 1910.132). A flat tool allowance paid without receipts is wages (Rev. Rul. 2005-52), so reimburse tools against receipts. The field services pack covers required safety gear with no limit, safety boots up to $200 a year, and reimburses tools up to $1,000 an item against receipts.
Does ExpenseOS pay per diem?
Per diem at GSA rates, with the first and last days at 75%, is coming to ExpenseOS, and it's the field services pack's choice for crews. Until then the pack caps meals at $68 a day, the federal standard rate, with receipts at $25, holds hotels to each city's market rate with extended-stay rates for long jobs, and works out mileage from the addresses at your company's rate.
Related
Start from the field services and construction pack.
A short walkthrough mapped to your policy: what the pack sets up, what you would change, and how every request is answered before the money moves.
Sources
- Tax home and temporary work, IRS Publication 463
- Per diem substantiation, Rev. Proc. 2019-48
- Wage recharacterization, Rev. Rul. 2012-25
- GSA per diem rates, FY2027
- IRS high-low method, Notice 2026-60
- IRS business mileage rate, 2026
- OSHA 29 CFR 1926.95(d) and 1910.132(h)
- Tool allowances, Rev. Rul. 2005-52
- California prevailing wage, travel and subsistence
- CoStar, in Hotel Business's extended-stay report
- GSA
- IBEW Local 1245
Rules and figures as published on 1 November 2026. This page summarizes public rules and published figures for general information; it is not legal or tax advice.