Reply to: Advice needed on international project day rate

[WordIsBond]

Very helpful and thanks for breaking it down further. Meeting the client tomorrow and this will be part of the discussion. As they're a large corporate my sense is they will prefer to book flights and hotel their side as they will already have discounted rates through their travel team, compared to paying me cost of me booking travel my side. We'll see.

Certainly if they are willing to book stuff it is easier for you, as long as they book reasonable flights for you.

[jameslmorgan]

Ask for business class!

Let's break this down. You want your client to pay, one way or another, for:
1. Airfare.
2. Hotel.
3. Ground transport (both in NY and in the UK).
4. Subsistence/food. This may be somewhat negotiable because you'd have to eat anyway, but you'll probably spend a lot more on that in NY than at home. They may want you to submit actual receipts and pay actual costs, which is fine. If so, ask them to reimburse YourCo (not you).
5. Travel time. This may be somewhat negotiable because you might just read something you'd be reading at home, or watch a movie, or even work on a project.
6. Jet lag. Again, this may be negotiable, but it is going to cost you work time and/or quality of life, so it is worth something.

How this happens can be very flexible. If they pay airfare directly, that makes it simpler. If they pay business class airfare, that makes it easier to do something useful on the flight (reducing the effect of #5) and also reduces the effect of #6 (you'll get more rest on the overnight back). If you get an uplift in rate whilst there, that can compensate for #3-6, too. Or you could ask for them to pay airfare / hotel plus $1000 per trip because of lost time (travel, jet lag), ground transport, and subsistence costs. Or, you could get them to agree to pay ground transport and subsistence. There's lots of ways to slice it but you want to consider #1-6 in negotiating what they pay.

The second aspect of this, after you've figured out what the client pays directly (like airfare and possibly hotel) and indirectly is to figure out whether you will pay the rest personally or through your company.

1. If the client is paying YourCo something, rather than to the airline, have YourCo pay the airfare.
2. If the client is paying YourCo something, rather than to the hotel, then check the scale rate vs the hotel cost. If the scale rate is higher, pay the hotel personally and have YourCo pay you the scale rate. If the actual cost is higher, have YourCo pay the hotel directly.
3. For meals, if the cost is lower than the scale rate, pay for the meals personally, and have YourCo pay you the scale rate. If the actual cost is higher than scale rate, have YourCo pay for the meals. (This is true even if the client is paying for the meals, either way, you submit the receipts and have them reimburse YourCo -- not you.)

In addition to the above, pay yourself the foreign per diem for incidentals. I believe that is an amount per night, so you can probably include the night of the overnight flight.

Very helpful and thanks for breaking it down further. Meeting the client tomorrow and this will be part of the discussion. As they're a large corporate my sense is they will prefer to book flights and hotel their side as they will already have discounted rates through their travel team, compared to paying me cost of me booking travel my side. We'll see.

[WordIsBond]

Excellent thanks for the detailed response. This is now likely to be 3-4 short trips to NYC over a 3 month period for me. You're right, I probably don't have as much leverage over the client on this as you did. It may actually be easier for me to let them pay for flights and hotel from their side. Then I can claim subsistence from MyCo?

Ask for business class!

Let's break this down. You want your client to pay, one way or another, for:
1. Airfare.
2. Hotel.
3. Ground transport (both in NY and in the UK).
4. Subsistence/food. This may be somewhat negotiable because you'd have to eat anyway, but you'll probably spend a lot more on that in NY than at home. They may want you to submit actual receipts and pay actual costs, which is fine. If so, ask them to reimburse YourCo (not you).
5. Travel time. This may be somewhat negotiable because you might just read something you'd be reading at home, or watch a movie, or even work on a project.
6. Jet lag. Again, this may be negotiable, but it is going to cost you work time and/or quality of life, so it is worth something.

How this happens can be very flexible. If they pay airfare directly, that makes it simpler. If they pay business class airfare, that makes it easier to do something useful on the flight (reducing the effect of #5) and also reduces the effect of #6 (you'll get more rest on the overnight back). If you get an uplift in rate whilst there, that can compensate for #3-6, too. Or you could ask for them to pay airfare / hotel plus $1000 per trip because of lost time (travel, jet lag), ground transport, and subsistence costs. Or, you could get them to agree to pay ground transport and subsistence. There's lots of ways to slice it but you want to consider #1-6 in negotiating what they pay.

The second aspect of this, after you've figured out what the client pays directly (like airfare and possibly hotel) and indirectly is to figure out whether you will pay the rest personally or through your company.

1. If the client is paying YourCo something, rather than to the airline, have YourCo pay the airfare.
2. If the client is paying YourCo something, rather than to the hotel, then check the scale rate vs the hotel cost. If the scale rate is higher, pay the hotel personally and have YourCo pay you the scale rate. If the actual cost is higher, have YourCo pay the hotel directly.
3. For meals, if the cost is lower than the scale rate, pay for the meals personally, and have YourCo pay you the scale rate. If the actual cost is higher than scale rate, have YourCo pay for the meals. (This is true even if the client is paying for the meals, either way, you submit the receipts and have them reimburse YourCo -- not you.)

In addition to the above, pay yourself the foreign per diem for incidentals. I believe that is an amount per night, so you can probably include the night of the overnight flight.

[jameslmorgan]

$4K came from pulling a number out of my backside that should be enough to cover airfare and expenses for a 1-2 day trip with the occasional upgrades to business class.

I communicated it to my client by making it part of my contract. It's definitely a contract negotiation item.

I had no issues but I might be negotiating from a greater position of strength than you are, and I'm saving them lots of money in other ways. I cite it as an incentive to them not to ask for unnecessary trips.

I use MyCo to pay the flight and travel from the airport to the hotel. All other expenses are covered by the scale treatment, and I do them for less than the scale, so I pay them using my own personal card and then have my company reimburse me the scale amount (as well as the international per diem of £10 / day for incidentals).

If I were to decide to stay in a place that is more expensive than the scale amount, I would have MyCo pay for the hotel. Not much reason for me to do that, though, you can get a decent place for less than scale pretty easily. Perhaps if I were hosting clients in a meeting at the hotel I'd choose a top-quality place but otherwise there's no need. Not usually taking my wife with me, NY holds no appeal for her, so no reason to spend stupid money.

If YourCo pays the expenses then scale is irrelevant. If you are spending less than scale, then paying it personally and reimbursing yourself the scale amount allows you to pry a few more quid out of your money without paying tax on it, which is always a winner for me. It's not enough to change your world or bankrupt the Exchequer but it might save enough tax to have a nice dinner out and boost the local economy. HMG should be happy about that.

Excellent thanks for the detailed response. This is now likely to be 3-4 short trips to NYC over a 3 month period for me. You're right, I probably don't have as much leverage over the client on this as you did. It may actually be easier for me to let them pay for flights and hotel from their side. Then I can claim subsistence from MyCo?

[WordIsBond]

Thanks for this, I had a few questions:

• How do you arrive at the $4000 figure for a trip to NYC?

• How do you communicate it to your client and any issues with them agreeing it?

• Do you use your MyCo bank account/card to pay for all of the expenses for flight, hotel, food for trips? I wasn't sure whether you did it all via MyCo bank account or some of it.

Thanks in advance.

$4K came from pulling a number out of my backside that should be enough to cover airfare and expenses for a 1-2 day trip with the occasional upgrades to business class.

I communicated it to my client by making it part of my contract. It's definitely a contract negotiation item.

I had no issues but I might be negotiating from a greater position of strength than you are, and I'm saving them lots of money in other ways. I cite it as an incentive to them not to ask for unnecessary trips.

I use MyCo to pay the flight and travel from the airport to the hotel. All other expenses are covered by the scale treatment, and I do them for less than the scale, so I pay them using my own personal card and then have my company reimburse me the scale amount (as well as the international per diem of £10 / day for incidentals).

If I were to decide to stay in a place that is more expensive than the scale amount, I would have MyCo pay for the hotel. Not much reason for me to do that, though, you can get a decent place for less than scale pretty easily. Perhaps if I were hosting clients in a meeting at the hotel I'd choose a top-quality place but otherwise there's no need. Not usually taking my wife with me, NY holds no appeal for her, so no reason to spend stupid money.

If YourCo pays the expenses then scale is irrelevant. If you are spending less than scale, then paying it personally and reimbursing yourself the scale amount allows you to pry a few more quid out of your money without paying tax on it, which is always a winner for me. It's not enough to change your world or bankrupt the Exchequer but it might save enough tax to have a nice dinner out and boost the local economy. HMG should be happy about that.

[jameslmorgan]

But if the client wants me to come to NY, they pay MyCo $4000 for the trip, in addition to any billable hours whilst there. MyCo pays the airfare. Usually fly economy out, might upgrade to business coming back so I can sleep. Can usually do something on the plane on the way out which I can bill to one client or another, so the flight to NY isn't a total loss. Usually don't try to work on the return flight.

I pay the hotel and food and MyCo pays me the scale rate of $318.5 (24 hour plus room) per day, plus £10 for incidentals per night. I usually get a decent place and decent meals for less than $200.

I charge $5000 for Chicago trips, it's a little further, a little longer flight, and I don't like Chicago. I hate flying to LA, I charge $7500 for that. Only had to do that once, they schedule me to come to NY when they'll be in NY too.

Thanks for this, I had a few questions:

• How do you arrive at the $4000 figure for a trip to NYC?

• How do you communicate it to your client and any issues with them agreeing it?

• Do you use your MyCo bank account/card to pay for all of the expenses for flight, hotel, food for trips? I wasn't sure whether you did it all via MyCo bank account or some of it.

Thanks in advance.

[jameslmorgan]

Great advice again thanks all. Will keep the thread updated as this moves forward. Project now starts early October so has slipped a month on start date at client side.

[jamesbrown]

What you bill your client is between you and your client. What you claim in expenses from YourCo is between you, YourCo, and HMRC. On the former, you are constrained only by what you can agree with your client. On the latter, you are constrained by law. I do something similar to WiB, unless it's a fixed price gig, and then it has been factored upfront.

[WordIsBond]

Useful input thanks. So did you mean you charge a higher day rate for days when in NYC vs UK? I'm considering my usual day rate of £500 for UK time and £650 or £700 for NYC meetings days. Like you I would prefer to be compensated for travel/jet lag.

Because of the nature of my business, I use an hourly rate, not a day rate. I charge exactly the same hourly rate in NYC for meetings / demos / project delivery as I charge sitting in my study at home.

But if the client wants me to come to NY, they pay MyCo $4000 for the trip, in addition to any billable hours whilst there. MyCo pays the airfare. Usually fly economy out, might upgrade to business coming back so I can sleep. Can usually do something on the plane on the way out which I can bill to one client or another, so the flight to NY isn't a total loss. Usually don't try to work on the return flight.

I pay the hotel and food and MyCo pays me the scale rate of $318.5 (24 hour plus room) per day, plus £10 for incidentals per night. I usually get a decent place and decent meals for less than $200.

I charge $5000 for Chicago trips, it's a little further, a little longer flight, and I don't like Chicago. I hate flying to LA, I charge $7500 for that. Only had to do that once, they schedule me to come to NY when they'll be in NY too.

Not saying you should do comparably, what I do works for me and my clients. I was just suggesting that you might be better off if you pay expenses yourself and have YourCo pay you the scale rates, rather than having YourCo pay the expenses.

[darmstadt]

Useful input thanks. So did you mean you charge a higher day rate for days when in NYC vs UK? I'm considering my usual day rate of £500 for UK time and £650 or £700 for NYC meetings days. Like you I would prefer to be compensated for travel/jet lag.

I charge my standard hourly rate and the customer pays for everything else, hotel, Über and limo service, business class flights, other expenses and also get a per diem of around a couple hundred dollars per day

[jameslmorgan]

Thanks for letting us know, it's been an interesting one.

Re: expenses on your NY trips, I'm using the worldwide subsistence rates. Discussion here: https://www.contractoruk.com/forums/...nce-rates.html

Obviously, if your client is arranging / paying for everything, it's not relevant.

MyCo charges my NY clients a flat fee for these trips. I book hotel and pay expenses personally, and have MyCo pay me the scale rates. If your tastes are more expensive than the scale rates, then have YourCo pay expenses directly, but if less than the scale rates, pay it personally and collect the scale rates.

I bill my clients more than the scale rates for a NY trip (I expect to be paid something for the travel time / jet lag, too), and pay less for hotel and food than the scale rates, so I do pretty well out of it. Getting a little old to enjoy the trip as much as I used to, but the money is good.

Useful input thanks. So did you mean you charge a higher day rate for days when in NYC vs UK? I'm considering my usual day rate of £500 for UK time and £650 or £700 for NYC meetings days. Like you I would prefer to be compensated for travel/jet lag.

[WordIsBond]

Thanks for letting us know, it's been an interesting one.

Re: expenses on your NY trips, I'm using the worldwide subsistence rates. Discussion here: https://www.contractoruk.com/forums/...nce-rates.html

Obviously, if your client is arranging / paying for everything, it's not relevant.

MyCo charges my NY clients a flat fee for these trips. I book hotel and pay expenses personally, and have MyCo pay me the scale rates. If your tastes are more expensive than the scale rates, then have YourCo pay expenses directly, but if less than the scale rates, pay it personally and collect the scale rates.

I bill my clients more than the scale rates for a NY trip (I expect to be paid something for the travel time / jet lag, too), and pay less for hotel and food than the scale rates, so I do pretty well out of it. Getting a little old to enjoy the trip as much as I used to, but the money is good.

[jameslmorgan]

Sounds like the client had a discussion internally with their legal team and came to a similar conclusion to what was discussed here previously.

I'm glad that this contract is moving forward for you now.

Yes it does and my client realised my status was quite different to hers and the rest of the team who are employees of the large corporate.

I'm now looking at ways we can work but the project will be much shorter and less involved for me as I can't be in NYC every week for 5 months.

[highlandspring]

Rate

Suggest charging £750 per day, that makes it more worthwhile. It will be tough on you physically after a while if you travel back often, tired over weekends etc it takes me a few days to recover from a long haul trip.

[redgiant]

Yes, I think it could be turned into a win too. Would mean a max of 2-3 of visits to NYC, rather than 'commuting' there, and for meetings and non-productive work.

No problem with update, appreciate the feedback on this thread.

Sounds like the client had a discussion internally with their legal team and came to a similar conclusion to what was discussed here previously.

I'm glad that this contract is moving forward for you now.