RE: Hourly Rate & Per Diem??

Subject: RE: Hourly Rate & Per Diem??
From: "Michelle Wolfe" <WOLFEM -at- bcbsil -dot- com>
To: <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Wed, 15 Mar 2000 15:00:38 -0600

A few years ago, I worked on a government contract for a consulting firm as a subcontractor. Most government contracts do not allow for travel expenses to bring in contractors from out of town (per diem). Therefore, consulting companies build the per diem into their proposals and then use the "2 paycheck" method to pay what is basically a per diem amount to satisfy the IRS for out of town consultants.

If you are working directly for a client, most are more than willing to pay a set per diem for any related travel. Most often you need to complete an expense report, providing receipts for your expenses. You receive the lesser of the expenses or the per diem rate for each day. For example: based on a $150 per diem, if you spend $140 the first day and $160 the next day, you only are reimbursed the $140 + $150.

Some companies are less restrictive and allow you to total your expenses for the trip and then offset that amount by the total per diem for the trip. For example: a $150 per diem for a three day trip is $450. If your total expenses are less than $450, you get the amount of the expenses added to your paycheck (listed as reimbursed expenses). If your total expenses are greater than $450, you get $450 added to your paycheck and you get to eat the rest (although you may already have <grin>).

Personally, I prefer the expense report method. There have been times where I ended up earning less money using the "2 paycheck" method.

Michelle Wolfe
Training Consultant

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