High-Low Accounting is a US legal settlement method in which the employee is reimbursed for business expenses (described by US tax law) by per diems for lodging, meals, and incidental expenses instead of receipts. This is a simplified method for determining accommodations plus M&IE maximum rates for continental USA (CONUS). This method classifies all CONUS localities as either low-cost or high-cost localities. These per-diem rates vary depending on locality and can differ according to season (for example, the summer rates can be higher than winter rates due to the tourist season). For one-day trips, the traveler does not receive reimbursement. For trips lasting more than one day, the traveler is reimbursed according to the rates valid for the locality where he is at 12 midnight local time. If the trip ends before midnight, the locality where the traveler is during the last minute of the trip applies. This is called the "midnight rule". For each quarter day (6 hours, "quarter rule") on the trip, the employee is reimbursed one fourth of the full per diem.
Trip provision variant 80, with the CONUS rates valid until December 31, 1996, is the default value supplied by SAP in Travel Management Customizing (table T706V for meals and incidental expenses, T706U for lodging) for the high-low substantiation method. You can set the per-diem rates higher. If the amounts are above the per diem rates set by US law, the difference is taxed as wages or salary to the employee in Payroll.