The Latin loan phrase per diem, literally meaning per day, is used in English to mean by the day, per day, reckoned on a daily basis, or paid by the day. It also works as a noun referring to a daily allowance, usually given by an employer or client, for expenses.
In normal use, per diem does not need to be italicized. Some writers hyphenate the phrase when it’s a phrasal adjective preceding a noun (e.g., on a per-diem basis), but in English we usually leave that phrasal-adjective hyphen out of Latinisms.
Examples
Maybe the governing body needs to cut back, do an honest day’s work and cut back on their per diem pay too. [letter to Wisconsin State Journal]
Munro said members of the proposed commission would not be paid nor would they be eligible for per diem payments. [Las Vegas Review]
A 188-member legislature times the per diem rate of pay for however many days it takes to shovel the garbage that goes on in Annapolis. [Baltimore Sun]
The rent is deducted from the per diem the company receives for housing them, he said. [Standard Speaker]
Members receive a per diem for attending board meetings. [Tacoma Daily News (link now dead)]