Per diem for construction workers

Working in a different location is common in the construction industry. A project may require you to travel from your hometown, stay elsewhere during the workweek, and be away from your family and daily routine. 

But what exactly are the rules regarding per diem allowances for construction workers? Who is entitled to compensation, what is the employer responsible for, and how do accommodations and travel work? 

Here, we'll go over what you need to know about per diem in the construction industry, the rules that apply, and what you should check before accepting an assignment in another location.

What is a per diem in the construction industry? 

A per diem is a form of compensation that may be paid when you travel for work and incur increased living expenses, such as for food and incidental expenses. This may apply when, as a construction worker, you are temporarily working in another location and need to stay overnight away from your usual place of residence. 

It is important to distinguish between per diem and other forms of compensation. Per diem is intended to cover increased living expenses during a business trip. Reimbursement for travel, lodging, and travel time, on the other hand, may be regulated separately through an employment contract, a collective bargaining agreement, or an agreement with the employer. If you are working in another location in the construction industry, you should therefore find out what conditions apply to your specific assignment.

Here's what you should check before starting an assignment

Work Location: Where is the construction site located in relation to your home and your usual workplace?

Accommodations: Will you need to stay away from home during the assignment?

Terms of Employment: What does your employment contract—and any applicable collective bargaining agreement—say?

Employer Policies: Does the employer provide a per diem or any other form of compensation? 

Duration of the assignment: Is the work temporary, or will it continue for a longer period?

Tax rules determine when compensation can be paid tax-free. However, this does not in itself mean that the employer is always required to pay a per diem allowance. This must be assessed based on the terms and conditions of your employment.

How much is the per diem allowance for construction workers?

The amount you can receive in a per diem depends, among other things, on the length of the trip, whether you stay overnight, and whether your employer pays for meals. The Swedish Tax Agency sets standard amounts for tax-free per diems for business trips within Sweden. These amounts may change from year to year, so it is important to check the rates that apply for the current year. 

For a business trip that includes an overnight stay, a tax-free per diem may normally be paid in accordance with the following principles:

• Full day: A flat rate may apply depending on when the trip begins and ends.
• Half day: A lower amount may apply depending on the departure and return times.
• Meals Paid by the Employer: The per diem allowance may need to be reduced. 
• Longer assignments in the same location: Special rules regarding reduced per diem may apply.  

In other words, there is no single amount that applies to all construction workers.

Compensation may also be affected by collective bargaining agreements and individual terms of employment. 

Always check the current amounts and terms with the Swedish Tax Agency before counting on a specific amount in your pay or travel reimbursement.

Who pays for housing when you work in another city?

Housing is an important consideration when you take a construction job far from home. If the assignment requires you to stay overnight in another location, you need to know whether your employer will arrange housing, reimburse your expenses, or expect you to cover them yourself. There is no general rule stating that all construction workers always receive free housing. What applies depends, among other things, on the terms of employment, any collective bargaining agreements, and the agreement made prior to the assignment.

Before you accept a job offer, you should ask:

• Does the assignment include housing?
• Does your employer pay for your housing directly, or do you receive reimbursement afterward?
• Is the housing a single room, shared housing, or another arrangement?
• How far is it from the accommodation to the construction site?
• Are parking, internet, or other practical expenses included?

Clear information about housing makes it easier to plan your finances and decide whether an assignment in another location is right for you.

How does transportation to and from the construction site work?

When you work in a different location, travel can affect both your finances and your free time. That’s why it’s important to find out how travel to and from the workplace is handled. Depending on the assignment, there may be agreements regarding, for example, travel reimbursement, mileage reimbursement, access to a company car, or reimbursement for trips home during the work period.

It is also important to distinguish between different types of travel. Travel from home to your regular workplace is not necessarily assessed in the same way as business travel between workplaces or travel to a temporary assignment. Ask your employer what applies to your specific situation, and feel free to request the terms in writing.

What are the rules for longer construction projects in another location?

A temporary assignment can last a few days, several weeks, or even longer. The longer you work in the same location, the more important it becomes to understand the rules regarding per diem and other reimbursements. 

Tax rules may result in a reduction of the tax-free per diem allowance during extended stays in the same location. The determination depends, among other things, on the duration of the work and whether the conditions for a business trip are still met. You should therefore not assume that the same tax-free per diem allowance applies throughout the entire assignment.

Go over the terms and conditions with your employer before you start, especially if you’ll be living in another city for an extended period. This will make it easier to understand what you’ll be paid and what expenses you’ll have to cover yourself.

What should you ask before accepting a job that includes a per diem?

Staffing needs in a construction project almost always change as the project progresses. Different phases place different demands on both the number of resources and the type of expertise required. For example, a construction job in another location can be a great opportunity to grow professionally and gain experience from new projects. But to determine whether the job is right for you, you need to understand the entire compensation package. 

Here is a checklist to go over with your employer:

• Salary: What is the base salary for this assignment?
• Per Diem: Is a per diem offered, and what are the terms and conditions?
• Accommodations: Who books and pays for the accommodations?
• Travel: How are trips to and from work handled?
• Working Hours: What are the working hours, and how is any overtime compensated?
• Collective Bargaining Agreements: Which agreement applies to the employment?
• Assignment duration: How long are you expected to work in this location?
• Payment: How are wages, per diem, and other compensation reported on the pay stub?

Once you have the answers to these questions, it will be easier to compare different offers and make an informed decision.

Find construction jobs in other cities with ByggLove

Would you like to work on new projects and are you open to assignments in other locations? ByggLove offers flexible staffing solutions in the construction industry and may be a good option for you if you’re looking to find new assignments and grow in your career. See what opportunities we have available right now. 

Frequently Asked Questions About Per Diem Allowances for Construction Workers