Originally Posted by
greggarious
Why can't the fact that it is taxable be taken into account when setting the per diem limit?
(Ex: If we desire the employee to have X available for daily spending, set the per diem rate at Y, where Y after taxes roughly equals X)
As I said, some countries (or jurisdictions) just don't permit it. There may be a dozen workarounds, but if it's not permitted, it's not permitted.
Bottom line, even if there is a workaround, the entire purpose of a per diem is to make the process easy for both employee and employer. What you suggest requires dual bookeeping. That is harder for both.