Author Topic: Ethics of per diem  (Read 5828 times)

Gyosho

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Ethics of per diem
« on: August 19, 2016, 09:10:14 AM »
I'm going on a weeklong business trip which is providing a generous per diem. As a Mustachian, there is no way I can even bring myself to spend the amount of money the per diem is providing. Is it ethical to take the entire per diem and save the extra? Or should I just claim as expenses the *very low* amount that I will actually spend? I suspect that option 2 will make me a laughingstock among my spendy co-workers.

What would you do?

NoStacheOhio

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Re: Ethics of per diem
« Reply #1 on: August 19, 2016, 09:31:33 AM »
It depends on if it's a true per diem or an expense allowance where you're seeking reimbursement.

If they're giving you the money up front, do with it what you will.

If you have to submit receipts for reimbursement, spend what you want, maybe live it up a little, and use a rewards credit card. I tend to spend more than I normally would when I travel, but I rarely hit the spending limit.

zolotiyeruki

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Re: Ethics of per diem
« Reply #2 on: August 19, 2016, 09:32:08 AM »
It depends on if it's a true per diem or an expense allowance where you're seeking reimbursement.

If they're giving you the money up front, do with it what you will.

If you have to submit receipts for reimbursement, spend what you want, maybe live it up a little, and use a rewards credit card. I tend to spend more than I normally would when I travel, but I rarely hit the spending limit.
^^^ This.  Couldn't have said it better myself.

sirdoug007

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Re: Ethics of per diem
« Reply #3 on: August 19, 2016, 09:34:42 AM »
If it is a true fixed per diem it is expected that you spend less than that.  It is generally considered a small bonus for the hassle of traveling.

Ask your boss if you have a question about it but I've never heard of an organization caring how much their employees spend of a per diem.

There are people that take living cheaply to save the per diem and elevate it to an art form!

forummm

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Re: Ethics of per diem
« Reply #4 on: August 19, 2016, 09:45:09 AM »
There are people that take living cheaply to save the per diem and elevate it to an art form!

<raises hand> I usually save the entire amount, or the entire amount minus $5-10/day. I bring some food with me or stay in places that offer breakfast, etc. But saving the per diem isn't enough to make it worth the extra hassle of traveling, so I try not to travel for work at all if I can help it.

zephyr911

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Re: Ethics of per diem
« Reply #5 on: August 19, 2016, 09:48:19 AM »
I've always had a true per diem as a government guy, and happily stashed 50-75% of it (depending on destination and logistical constraints) while still having some fun and interesting experiences if unique opportunities presented themselves.

Inflating actual expenses for reimbursement within a prescribed limit is extremely common in some fields, and maybe even tacitly accepted by management, but not very honorable. If you're in the latter situation, consider indulging a little if it will actually be enjoyable or useful in some way, but don't fake it. Do think about the intangibles - for example, if you're traveling with CWs, eating out together may enable you to get to know them in ways you might not otherwise, and gain insights that could take much longer to acquire back home. I've seen it firsthand over the years (including one trip just a couple of weeks ago).

honeybbq

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Re: Ethics of per diem
« Reply #6 on: August 19, 2016, 09:55:36 AM »
With per diems I usually found I made money - I would eat a simple breakfast and lunch and splurge a little on dinner. It's definitely ethical to pocket the per diem amount, they are paying you so they don't have to deal with reimbursing you for your banana and coffee, and deal with everyone's BS. It's win/win.

south of 61

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Re: Ethics of per diem
« Reply #7 on: August 19, 2016, 10:05:11 AM »
I rarely travel but just last week I was away for a whole week and got crazy $$$ for per diems. I used it to buy new shoes and clothes for work (same as I did last time I traveled for work a couple of years ago) - so I haven't spent any money on work clothes aside from the per diems in 3 years now! Even with buying a new wardrobe I still saved almost 40% of the generous per diems.

Don't make me question the ethics of it - I justify taking the $$$ by having to fly red-eye flights, deal with jet lag and be away from my family for a week.

Migrator Soul

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Re: Ethics of per diem
« Reply #8 on: August 19, 2016, 10:18:23 AM »
Government/military 'stache here. Take the per-diem, and don't feel bad about making money off of it. If you have the chance, take it! I always make money off per-diem, it's a great way to supplement savings.

bacchi

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Re: Ethics of per diem
« Reply #9 on: August 19, 2016, 10:49:45 AM »
The company takes a writeoff of the entire per diem. It's yours.

When researching per diem, I found somewhere in the docs that the GSA, the agency that sets the rates, expects .gov employees to take the full amount even if unspent. As someone mentioned above, it's more hassle to go through receipts and determine if they're actually food or incidental expenses.

DoubleNickels

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Re: Ethics of per diem
« Reply #10 on: August 19, 2016, 11:14:50 AM »
I tend to agree with all of the other posters; in fact I think per diems were also created to incent travelers to save on travel expenses, with the idea that you will be possibly pocketing some. They are usually based on customary costs in those locales.

However, I'll offer another perspective, and one I think of when I travel (I don't get a per diem).  I am not close enough to FIRE to have the luxury to lose my job.   Therefore, one of my thoughts when anything relates to my work, I weigh out the following thought: "If we were to enter another recession, and my company was cutting people, would this choice (whatever it is) add to my value, or take away from my value to my employer?"   In other words, being the laughingstock of your coworkers might make you less vulnerable in a layoff.   

Again, another perspective.  Your mileage may vary.

PARedbeard

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Re: Ethics of per diem
« Reply #11 on: August 19, 2016, 11:20:27 AM »
This is a tricky one for me. I will admit that in the past, I obtained over-inflated food receipts from mom and pop groceries/restaurants while on a dig simply so that I could get my full per diem. The way I looked at it then was that the per diem was part of my pay package, and I was entitled to it.

Not sure if I would still do that. At the time, the company was not willing to negotiate to lessen my per diem and increase my hourly pay.

MoonLiteNite

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Re: Ethics of per diem
« Reply #12 on: August 19, 2016, 07:55:00 PM »
Well if you are on per diem, you basically are PAID flat daily rate, and you don't need to show proof of anything, you just get extra money in your paycheck. And you can pocket whatever you don't spend.

The grey area would be...  if you are just being paid for for food  and you need to show recipts and such
Most companies have a limit of like 40$/day at most, and you have to show proof of where you spent. And 99% of the time, they never ask to see proof, or anything.

Then you can buy food cards....
Go to KFC, buy a card for 25.
Go to chili's and get another 25 card.
or even walmart and get a card there.


I personally used the hell out of my daily limits, tea, coke, beer, fries, orings, and a burger, tag on that chocolate cookie from pizza hut. Dinner was always delivered, bought a girl i was seeing some food and supplies. But once i was put on per a diem (after 3 weeks they switched me once my stay was going to extend another 9 months) i went back into savings mode, cause 48$/day is pretty nice!!!
« Last Edit: August 19, 2016, 07:59:18 PM by MoonLiteNite »

use2betrix

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Re: Ethics of per diem
« Reply #13 on: August 20, 2016, 08:03:10 AM »
I have received a minimum per diem of $650/ wk (one job was $1100/wk) for every single week the last 4+ years.

I hardly feel guilty about it lol.

My current company gives me a $500/mo trip home allowance too. Paid out on my last paycheck every month, regardless of whether I "go home"'or not. Definitely don't feel guilty about that either.

I'm a red panda

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Re: Ethics of per diem
« Reply #14 on: August 20, 2016, 08:09:56 AM »
If it's a per diem, take the whole thing.
If it's an expense account with a daily cap, it is unethical to claim more than you spent.

Villanelle

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Re: Ethics of per diem
« Reply #15 on: August 20, 2016, 08:30:29 AM »
Just ended a 46 day period of per diem for both Husband and me (I think mine is at 75% of the full rate).  We pockets a great deal of it.  I never struggled even a little with the ethics, as if they wanted it to be a true reimbursement, they would require receipts and pay out for actual expenses only.  Also, living on a hotel for 46 days cost us money in other small ways, like purchasing one roll of paper towels at a time rather than getting a cheaper bulk rate.  Those things are hard to account for, but the per diem helps offset a bit of that as well, in addition to paying for our meals. 

If it's a flat rate, there's no ethical dilemma at all (for me).  If it's supposed to be actual costs, then I think any kind of inflating, buying food for others or for future use, etc. is in fact unethical.  I want to get to FIRE and feel goof about the way I did it, and if that means an extra few months of work, or an few dollars less each month of FIRE, I'd choose that absolutely. 

Goldielocks

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Re: Ethics of per diem
« Reply #16 on: August 20, 2016, 10:09:48 AM »
As crazy as it sounds, many per diems were started because 1/3 of travellers would far, far exceed even that amount with the restaurants, incidentals and entertaining.

Yes, some companies now have a generous per diem to add a bit of incentive, especially when rule restricted pay increases overall, but really, they are a net cost saver to the company.  Really!


One way the save costs is on the accounting for tracking expenses.  Paying you 1 hour to submit expenses, then others 1 hour plus admin to pay them out is quite costly.

Also, if you travel a lot to different sorts of places, you will see that the per diem barely covers some parts of the country (urban centers, Chicago, DC, San Francisco) where you need to pay for taxi's and food, and you will eventually have incidentals, such as buying a book (because there is no library you can use), getting clothing washed (because you have no access or time while working to find a laundromat), even the need to buy a small cooler to fit your grocery bought food into.. shampoo and hairbush when you bag is misplaced for 3 days...

ooeei

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Re: Ethics of per diem
« Reply #17 on: August 20, 2016, 11:32:01 AM »
I've never had per diem, but don't hesitate to spend on things I normally wouldn't and get reimbursed.  Going out to a nice dinner or stopping to get a snack somewhere takes a bit of the sting out of having to travel.  When I'm going on vacation on my dime I don't mind roughing it a bit, but if I get told I have to drive to another city this afternoon and stay the night I'm not going to be very happy if I'm roughing it.  I'll also be less inclined to volunteer for travel in the future.

The company offers it so you'll be happier with traveling, so take it!  Assuming you're per diem, if being thrifty and pocketing it makes you happier with travelling than spending it all, I'm sure they're fine with it.  It's an incentive, take it!  If it's not per diem, get an appetizer at a restaurant or some extra snacks on the road.

marty998

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Re: Ethics of per diem
« Reply #18 on: August 20, 2016, 04:33:54 PM »
I was paid a per diem of 30 quid a day for 6 weeks on a trip many years back. Managed to save about 2/3 of it + saved $300 by not needing to buy train tickets as I was away from home :)

No harm in turning a profit from it if you can.

vivian

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Re: Ethics of per diem
« Reply #19 on: August 22, 2016, 07:18:32 AM »
If it is a true fixed per diem it is expected that you spend less than that.  It is generally considered a small bonus for the hassle of traveling.


My company definitely does not consider the per diem a bonus for the hassle of traveling. They intend it to be purely reimbursement for travel. That said, they also find it more efficient to give a daily set amount than have people bother with receipts that then have to be reviewed by multiple people. Take the set amount and save everyone the hassle of wondering why you are asking for less.


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