Day rate: should it be nett or gross expenses guidance requested

[NotAllThere]

I had a contract that was day rate + expenses. The manager got bored with handling the expenses, so we renegotiated and I ended up with a day rate that more than covered expenses - and they still pay any long haul flights for me.

[Ulsinus]

Depends on circumstances and bargaining power. -Shy bairns get nowt.

A very good point. The client came looking for me and needed a tight deadline to be met. I on the other hand had other work in the pipeline and was not under any such time pressure. This time pressure helped me to secure the work at the right return for me.

[Ulsinus]

Normally travel to a single place of work should be covered in the day rate. For extra travel perhaps abroad, probably bill seperately.

Thanks for that clarification and that is what I ended up doing.

I explained to the client that my day rate included the cost of travel and that was what I meant by expenses. After a bit of further negotiation we agreed on a consolidated day rate figure. And amended the contract accordingly.

[northernladuk]

In two years, I went about 4 times so can't complain...

I bet you did at the time....

[BlasterBates]

Normally travel to a single place of work should be covered in the day rate. For extra travel perhaps abroad, probably bill seperately.

[psychocandy]

I had a gig once where it was inclusive - ie. they didnt pay expenses if I had to go to see their customer (100 miles away). It was in the contract that I could got average once a month.

In two years, I went about 4 times so can't complain...

[mudskipper]

Most won't be expecting to pay regular expenses - i.e. the cost of you working at their main office, but many will pay if they ask you to work elsewhere.

So from that point of view, the rate you quote should cover your expected costs of delivering the contract at the usual location, and any additional requirements should be negotiated.

[TheCoconutDog]

Can I just ask, what makes you think the client would pick up your expenses ? Very few <5% will, so you factor it it to your quote and if you calculate at say £200 a day and market rate for your skill set is £300, the client is not going to entertain a quote of £500

Depends on circumstances and bargaining power. -Shy bairns get nowt.

[tarbera]

I’m new to contracting and I wonder whether it is better to quote my day rate inclusive of all expenses or my day rate exclusive of expenses and charge these to the client at cost (plus of course the VAT)?

What are the pros and cons for each approach?

In the experience of the forum do clients have a preference?

Is one way more beneficial for the contractor than the other?

Background: I trade through a limited company. I’m up to speed with the demands of IR35 and the importance of having a robust business to business contract in place.

The question has been prompted by being asked to provide a quote for five weeks work based at a client’s offices.

The help and assistance of forum members will be much appreciated.

Can I just ask, what makes you think the client would pick up your expenses ? Very few <5% will, so you factor it it to your quote and if you calculate at say £200 a day and market rate for your skill set is £300, the client is not going to entertain a quote of £500

[TheCoconutDog]

I think it's cleaner and cleaner to invoice expenses separately. That way if they decide to renegotiate your rate, the expenses are outside that negotiation.

[cojak]

Day rate: should it be nett or gross expenses guidance requested

I haven't had a contract that pays my expenses for 7 years.

The only exception to this is when I had to go out to Italy to do some training as part of the contract. Then the client picked up the tab. This was mentioned in the interview and I stated that I expected them to do this, which wasn't a problem.

If you do manage to get a contract that includes expenses, this needs to be in your contract, usually you pay out for the hotel or whatever then put the receipts into the client's expenses systems.

[Ulsinus]

I’m new to contracting and I wonder whether it is better to quote my day rate inclusive of all expenses or my day rate exclusive of expenses and charge these to the client at cost (plus of course the VAT)?

What are the pros and cons for each approach?

In the experience of the forum do clients have a preference?

Is one way more beneficial for the contractor than the other?

Background: I trade through a limited company. I’m up to speed with the demands of IR35 and the importance of having a robust business to business contract in place.

The question has been prompted by being asked to provide a quote for five weeks work based at a client’s offices.

The help and assistance of forum members will be much appreciated.