Key takeaways
- IRS Publication 463 defines incidental expenses as fees and tips given to porters, baggage carriers, hotel staff and staff on ships.
- In every GSA M&IE tier, $5 a day is the incidental portion. See the GSA M&IE breakdown.
- If you pay no meal costs on a travel day, the IRS lets you deduct $5 a day for incidentals instead of tracking each tip.
- Laundry, baggage fees, lodging taxes and meal tips are not incidentals. They are claimed as their own travel, lodging or meal costs.
What are incidental expenses?
A business trip comes with lots of small costs that aren’t a flight, a hotel or a meal. Only a few of them are “incidentals” in the official sense. That difference matters, because incidentals have a fixed home in the rules: they are part of the daily M&IE (meals and incidental expenses) rate inside per diem.
The IRS and the federal travel rules share the same narrow definition. Incidental expenses are fees and tips given to porters, baggage carriers, hotel staff and staff on ships. The tip you leave for housekeeping is an incidental. The $14 phone charger you grab at the airport is not. It’s either a separate business expense or a personal one.
Log small incidental costs on trips before you forget them with the Manage Receipt app.
Many people use “incidentals” to mean “miscellaneous,” the line at the bottom of a report for anything that doesn’t fit. That habit causes two problems. If your employer pays per diem, the M&IE rate already covers true incidentals, so claiming them again is double-dipping. And costs that aren’t incidentals, like laundry, can often be claimed on top of per diem, so lumping them in leaves money on the table.
What counts and what doesn’t
Use this list to sort the small costs from your last trip:
| Expense | Incidental? | Where it goes instead |
|---|---|---|
| Tip to a porter, bellhop or baggage carrier | Yes | Incidentals (M&IE) |
| Tip for hotel housekeeping | Yes | Incidentals (M&IE) |
| Tips to staff on a ship or ferry | Yes | Incidentals (M&IE) |
| Tip on a restaurant meal | No | Part of the meal cost |
| Taxi or ride-share tip | No | Part of transportation |
| Laundry and dry cleaning | No | Separate travel expense |
| Hotel and occupancy taxes | No | Part of lodging |
| Checked bag fees, shipping samples | No | Separate travel expense |
| Wi-Fi, business calls | No | Separate business expense |
| Toiletries, souvenirs, magazines | No | Personal, not deductible |
IRS Publication 463 lists laundry, baggage, business calls and tips on those services as deductible travel expenses in their own right. They don’t vanish because they aren’t incidentals. They simply belong on a different line of your expense report.
The incidental-only per diem rate
The GSA splits every M&IE rate into breakfast, lunch, dinner and incidentals. In each tier, $5 a day is the incidental share. At the FY2027 standard rate of $68 (October 1, 2026 to September 30, 2027), that works out to $16 for breakfast, $19 for lunch, $28 for dinner and $5 for incidentals.
The IRS uses the same figure for its incidental-expenses-only method. If you travel away from your tax home and don’t pay for any meals, for example because a conference or client covers them all, you can deduct $5 a day for incidentals instead of keeping track of every tip. The catch: you can use it only on days with no meal expenses at all, and you can’t combine it with the standard meal allowance on the same day.
Some employers follow the federal approach. When an event provides every meal, they cut that day’s M&IE down to the $5 incidental portion. If you get a reduced day rate, that’s usually why.
How to record them
- Capture itNote the tip right away: amount, who you tipped, where and when. Most tips never come with a receipt.
- Label it correctlyOnly porter, bellhop, housekeeping and ship staff tips go under incidentals. Laundry, bag fees and Wi-Fi get their own categories.
- Check your per diemIf you receive M&IE, don’t claim incidentals again as separate items.
- Attach it to the tripPut it on that trip’s report with the dates and business purpose.
Do you need receipts? Usually not. The IRS requires receipts for all lodging and for other travel costs of $75 or more, and a $5 housekeeping tip is far below that. You still need a record of the amount, date, place and business purpose, which a short log entry covers. See substantiation for the full rules. If you’re on per diem, you only need to prove the time, place and purpose of the business trip itself. Your employer’s policy may ask for more, so check it before you travel.
A good log entry is short and specific: “Oct 14, Chicago, $10 housekeeping tip, 2-night client site visit.” Write it the same day, while you still remember.
Small tips, still on the record
Tips rarely come with a receipt, so they are the first thing people forget to claim. With Manage Receipt you can scan whatever slip you do get, add a note for the tip, and file it under the right category on the same trip report as your hotel folio. Laundry and bag fees go on their own lines, so nothing is claimed twice or missed.
Explore AI Expense ReportsFrequently asked questions
Are tips incidental expenses?
Some are. Tips to porters, baggage carriers, bellhops, hotel housekeeping and staff on ships are incidental expenses. Tips on restaurant meals are part of the meal cost, and taxi or ride-share tips are part of transportation. Sort them correctly so they land in the right category on your expense report or tax return.
Is laundry an incidental expense?
No. Under the current IRS and federal travel definition, incidentals are only fees and tips to porters, baggage carriers, hotel staff and staff on ships. Laundry and dry cleaning on a business trip are still deductible, but as a separate travel expense. Employees on per diem may be able to claim laundry on top of M&IE if policy allows.
Do I need receipts for incidentals?
Usually not. The IRS requires receipts for lodging and for other travel costs of $75 or more, and tips almost never reach that. You still need a written record of the amount, date, place and business purpose. If your employer pays per diem, you only prove the time, place and purpose of the trip.
What is the $5 incidental expense rate?
It’s the incidental share of every GSA M&IE rate, and the amount the IRS lets you deduct per day under the incidental-expenses-only method. You can use that method only on travel days when you paid no meal costs, for example when a conference provides every meal.