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The short answer
A good US-Nigeria travel expense policy sets three things in writing: the daily allowance for each destination (for foreign travel, IRS Publication 463 points to the Department of State's foreign per diem rates), the receipts staff must keep, and the exchange rate used to convert naira claims to dollars. Because there is no official IRS exchange rate, the policy should name its rate source and the date it applies.
Why cross-border travel claims go wrong
A team that moves between Lagos and the US produces claims in two currencies, from two very different receipt cultures. A taxi in Lagos may be paid by bank transfer to the driver's account with no printed receipt; a hotel in Abuja may quote in dollars and charge in naira; a US employee's card statement shows a dollar figure that includes the card issuer's conversion. Without a written policy, every claim becomes a negotiation, and the US tax position of reimbursements becomes uncertain.
Per diems: which rate to use
For US employers, IRS Publication 463 (for 2025 returns) says the standard meal allowance rates do not apply to travel outside the continental United States. For foreign locations, it says the rates are set by the Department of State and points to its foreign per diem tables (aoprals.state.gov). Many US companies adopt those tables for Lagos and Abuja, or set a lower company rate.
For Nigeria-based staff visiting the US, the policy can use the federal per diem for the US city or a flat company rate. Whatever you choose, write the figure into the policy, name the source and set a date to review it, because published rates change.
Per diem or actual cost?
| Approach | How it works | Suits |
|---|---|---|
| Per diem for meals and incidentals | Fixed daily amount, no meal receipts | Frequent short trips |
| Actual cost with receipts | Reimburse what was spent, up to a cap | Senior staff, long stays, client entertaining |
| Hybrid | Hotel and flights at actual cost; meals by per diem | Most small cross-border teams |
Receipts and evidence
Publication 463 expects records showing the amount, time, place and business purpose of travel expenses, and a log or diary for business days when travel mixes business and personal time. It also explains that travel outside the US can count as entirely for business when, among other tests, the trip lasts no more than seven consecutive days or less than a quarter of the time abroad is personal. Your policy should ask for:
- Receipts or invoices for hotels, flights and any item above a threshold you set.
- For Nigerian payments without a printed receipt, the bank or app transfer record showing the payee, amount and date, with a one-line description.
- A short trip note: dates, cities, meetings held.
- Claims submitted within a fixed number of days of return.
Chapter 6 of Publication 463 explains accountable and nonaccountable plans; whether your reimbursement arrangement qualifies affects whether amounts are treated as wages. Ask your US payroll adviser to confirm the policy meets the accountable plan conditions before you rely on it.
Converting naira claims to dollars
The IRS foreign currency page says there is no official IRS exchange rate and that amounts are converted at the rate prevailing when the expense is paid; it lists sources such as banks, the Treasury and the Federal Reserve. Your policy should pick one method and stick to it:
- Card statement rate. If the employee paid by a dollar card, reimburse the dollar amount on the statement, which already includes the issuer's conversion and any foreign transaction fee.
- Rate on the day. For naira cash or transfers, convert at a named source's rate for the date of the expense.
- Actual conversion cost. If the employee bought naira for the trip, reimburse at the rate on their conversion receipt.
Worked example (illustrative rate only)
Example. A New York-based manager spends five nights in Lagos. Hotel ₦1,050,000 paid by dollar card shows as $712.40 on her statement; she claims $712.40. Local transport paid by transfer totals ₦96,000; at an example rate of ₦1,500 to $1 (illustrative, not a current rate) that is $64.00. Meals are covered by the company's per diem: five days at an example company rate of $90 is $450.00. Total claim: $712.40 + $64.00 + $450.00 = $1,226.40. The claim form shows each naira amount, the rate used and its date.
Advances, approvals and keeping records
- If staff need cash in naira before travel, issue an advance and settle it against receipts on return.
- Name who approves claims and the amount above which a second approver is needed.
- Keep claims, receipts and approvals with your foreign transaction records; see IRS record retention for foreign transactions.
- For Nigeria-based staff, a claim form that matches Nigerian practice helps; the Nigeria library has an expense claim form template.
Where Pryme fits
With a Pryme multicurrency business account, you can hold naira and dollars and pay a claim in the currency it was incurred in, with the rate and fee shown before you approve any conversion through Swap. The Finance agent can check claims against the policy and prepare reimbursements; a person approves above a set ceiling. Payments can produce regular or verifiable receipts.
Questions people ask
What per diem should I use for staff travelling to Lagos?
IRS Publication 463 says foreign per diem rates are set by the Department of State; many US employers use those tables or a lower company rate. Write the rate and source into your policy.
How do I convert naira receipts to dollars for expenses?
The IRS has no official rate; convert at the rate prevailing when the expense was paid, from a source you name in the policy, and show the rate on the claim.
What if a Lagos taxi driver gives no receipt?
Accept the bank or app transfer record showing payee, amount and date, with a short description, and say so in the policy.
Are travel reimbursements taxable wages in the US?
It depends on whether your arrangement is an accountable plan, explained in chapter 6 of IRS Publication 463. Confirm with your US payroll adviser.
Sources
- IRS: Publication 463, Travel, gift, and car expenses (for 2025 returns) · accessed Oct 2026
- IRS: Foreign currency and currency exchange rates (updated 22 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.