RE: Contractors & Per Diem

Subject: RE: Contractors & Per Diem
From: Katav <katav -at- yahoo -dot- com>
To: TECHWR-L <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Thu, 16 Mar 2000 13:26:36 -0800 (PST)

A. On a "cost plus" basis, per diem (a Federally fixed
rate for tax purposes in the USofA, but can vary in
real $s) is part of an agreed-to plus ... for example,
I did a job for a State and the per diem was $n/work
day for lodging and $n/workday meal. The State's max
rate for meals was less than the company for which I
worked my magic, so the company "lost" on that end.
Were the State and Fed rates the same? Don't know;
probably not.

B. For contractors - per diem USUALLY means taking
something off the top to shelter from taxes. Again,
the maximum rate is set by the Feds (in the Several
States & Commonweals) and works something like this:
Hourly rate is $100/work hour (low for TWs, of course)
Per diem is $100/work day
The math: $100 / 8 = $12.50 per diem per hour.
$12.50 * 8 (work hours)= $100 - the per diem rate
which is TAX FREE for the first 12 months.

Ahhh yes, sports fans, there IS a Federal limit on the
duration per diem can be taken. I do _NOT_ know if
this is on a "per job/project" basis or what. (That's
why I have a really good tax person.)

Final thought - having returned to the job market, I
am finding some agency recruiters etc. don't know PER
from DIEM - one told me the rate for MIAMI FL was
$n/hour, while a different one told me the rate for a
less expensive town in FL was closer to $n * 2. You
MUST do you own homework. Fortunately, the Feds post
the max on the WWW.

Now that you thoroughly are confused ...


=====
Katav ( katav -at- yahoo -dot- com )
''Despise not any person and do not deem anything unworthy
of consideration, for there is no person without his hour,
and no thing without its place'' {Ben Azzai [Avot 4:2]}


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