Get
Well, I suspected the $20/day plus hotel per diem I am paid is well below average. As an employer, you can cheap out on the per diem or you can provide an adequate rate. I hardly ever work out of town so it isn't a big deal for me to have to pay for my meals, but I suspect that going cheap on the per diem will reduce your employees efficiency. In every situation an employer should create an incentive for employees to provide quality work within a reasonable time frame. Experience is valuable, but I think money is a slightly better incentive for most.
imaudigger, post: 341393, member: 7286 wrote: Each employee should be paid a per diem that is sufficient to purchase a single bed hotel room and eat 3 meals a day. If they get bullied into giving part of their income to someone else who in turn makes them sleep on the bathroom floor....sounds like there may be bigger problems. We are not talking about child labor are we?
I agree that each employee should sleep in their own bed and get the established rate for two meals a day. In New York we are not allowed to request reimbursement for three meals a day. It is assumed I guess that no matter where they are, working out of the home office or on the road, the employee should be responsible for their noon meal.
First, you pay your employees their lodging and meal expenses according to your company policy on every job. You don't let the clients dictate whether the crew members get enough to sleep and eat 5-star with $ left over or barely get enough to stay at the Motel 6 and subsist on PB&J sandwiches. You pay a reasonable rate to cover decent lodging and decent meals, and if you agree to a lesser amount with the client, you absorb it as the cost of your willingness to be bullied in contract negotiations. The only possible exception to that is where the govt is the client and the local motels are willing to extend the govt rate to private consultants.
Second, the rates listed through California seem reasonable for many areas, but it's often difficult to get a decent room at the govt rate in the metro areas. Except where the govt is the client and you or your crews are able to secure reasonable lodging at the govt rate, you may need to look for a different source of per diem info, or look at a policy of paying 10% to 25% more than govt rate for lodging.
Third, as long as your employees are not exhibiting performance problems that could be related to eating poorly or sleeping in unhealthy conditions, why would you be concerned with how any of them spend their per diem? Do you concern yourself with how they use their paycheck with regard to rent/mortgage and groceries? Not likely. Unless you have a tax or contractual need to keep receipts, keeping tabs on their per diem spending is for busybodies more worried that an employee might be "cheating" the company out of something than they are about productivity, quality of work, and profitability. Nit-picking travelling employees about per diem is one of the best ways to destroy out of town productivity through attacking morale. Working away from home is a PITA. Per diem and OT are the only ways you have to directly compensate them for the inconvenience of staying away from home and family in order to make a profit for the organization. Let your people find their perks to compensate for that where they can and leave them alone about it.
Yummy avatar.
Per Diem is money to cover the cost of living while working on the road. It is not income. The lodging portion of the Per Diem rate is based on what the GSA negotiates with hotel chains for a particular area. Most of the time, you need a federal employee ID to receive the rate. You can often find hotels cheaper than the Per Diem rate. The GSA adjusts their Per Diem yearly effective October 1st. The base CONUS rate increased from $129 last year to $140 this year.
According to the IRS, if you pay more than the GSA rate, you are obligated to report the additional amount as income and pay taxes on it. It's best to write into your contracts that Per Diem is based on the GSA Domestic Per Rates and leave it at that.
Living in a camper is the way to go if you spend the majority of your time on the road. You have all of your personal belongings in your own personal space. You're also only living in your own dirt and not the dirt left by several hundred other people in a hotel room. When the project is complete, you hook the camper up to your truck and tow it home or to the next project. As previously mentioned, it's not just $16.67 per day. The camper costs money. Propane, maintenance, many campgrounds charge for electricity if on a monthly rate, tow vehicle, monthly camper loan payment, satellite TV, etc.
Apparently substance/travel per diem may or may not be considered tax exempt. Depends on how your employer pays it and how the accounting is done.
If you are required to return unused money and keep receipts, then I believe it is non-taxable income, otherwise it is regular income.
As a person that has spent years living in a travel trailer (in my single days) moving around a six state area, they are not cheap to own. Yes, you do come out better than staying in a motel. No, anything over the cost of the parking spot is not profit.
I like the idea of paying the motel and giving an allowance for eating.
James
imaudigger, post: 342303, member: 7286 wrote: Apparently substance/travel per diem may or may not be considered tax exempt. Depends on how your employer pays it and how the accounting is done.
If you are required to return unused money and keep receipts, then I believe it is non-taxable income, otherwise it is regular income.
If your employer reimburses you through an accountable plan then you don't have to keep meal receipts.
The first crew I worked on spent 3 nights per week in a trailer (working 4 14-hour days per week and getting paid for 10), in the middle-of-nowhere Utah. It would have been a four+ hour drive back to any town. At the end of the week, we usually would get in REALLY late on our own time too. We filled coolers with steaks, lunch and grand breakfasts on Monday and ate really well until we got back. There was a $12 day limit per person, and back then that was a lot of money. I have never eaten so well. We had nice trailers and we set them up in great places, often leaving them for weeks at a time.
During deer season we would bow-hunt in the morning and evening. We were not allowed to open carry at this job so during rifle season someone would have to take a personal truck with all the guns in it.
But the thing that has really stuck in my mind is would put TP in our trucks from the main office to use while in the field. One day the bean-counter Elmer went ballistic and accused us behind our backs of stealing TP and taking it home. When we got back to town, we were above even discussing it and Elmer ran around complaining to anyone who would listen for a month about what a bunch of crooks our crews were. He wanted us all fired.
At some point he figured out on his own that we were using the TP we took from the office in the field for TP. Imagine that.
M
