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Do You Stretch Your Per Diem for Profit (and Should You)?

Do You Stretch Your Per Diem for Profit (and Should You)?
Jeff Edwards

With a few easy tricks, business travelers in the right situation can turn per diem allowances into healthy bonuses, but just because company-provided travel funds can be used to help supplement income, that doesn’t necessarily mean it is always the most ethical of choices. FlyerTalk weighs in on the pros and cons of stretching a per diem for profit.

There are as many different travel policies as there are employers who require travel on the company dime. For some business travelers being frugal with a per diem can make nights away from home a bit more happy and much more healthy, but for others counting pennies will only help their employer’s bottom line and add unwelcome hassles while on the road.

The FlyerTalk member who first posed the question, “What are your best tricks for making money off of Per Diem?” says employing money-saving tricks creates an extra $900 to $1,300 in income annually. The frugal business traveler says eating meals from the grocery store rather than restaurants not only saves money, but allows for a healthier lifestyle. Choosing fast casual dining options or eating off happy hour menus, on the other hand, saves time and money but doesn’t include the same diet-friendly advantages.

Even this industrious employee confesses that turning per diem allowances into disposable income can be something of an ethical minefield – noting that company policy requires deducting any hotel-provided breakfasts from the claimed stipend. Exceptions for dietary restrictions, but not for other considerations, further muddies the waters.

One U.S. government employee suggested that the per diem allowance is just that and workers traveling for Uncle Sam are very much entitled to keep the change when using a per diem for travel expenses. This information led to yet another interesting tip for keeping meal expenses below budget: staying at extended-stay hotels where lunch and dinner are sometimes provided and kitchens and outdoor grills make preparing one’s own meals much easier and more cost-effective.

Other business travelers say that in their situations, any per diem money not spent is expected to remain in the company coffers. One business traveler said that the unnamed company went as far as auditing flights to see if meals were provided (and considered employees who still used the meal per diem guilty of double-dipping by making the business pay for the same meal twice).

Other travelers noted that the whole idea of pinching pennies while on company business is an unnecessary distraction. One experienced road warrior offered that grocery shopping and planning a menu while on company business might not be the most productive use of time and energy.

“Why stop there? If you really want to make money eat at a food bank or soup kitchen,” FlyerTalk member Badenoch wrote with a wink and a nod. “If you have an accommodation per diem find a homeless shelter. You’ll save a fortune. I’m there to do business not preoccupy myself with trivial matters like searching out cheap food. I don’t scrimp on food or room quality just so I can scam a few bucks on my per diem.”

What are the best ways to save some per diem cash as mad money? Is doing so ethical? Is it even worth it to deny oneself comforts while traveling in the hope of having a few extra bucks at the end of the year? These questions and more are being answered right now in the TravelBuzz forum.

 

[Featured Image: Shutterstock]

View Comments (14)

14 Comments

  1. bbriscoe34

    July 21, 2019 at 2:30 pm

    LOL -if its with-in company policy, its a non-issue, not an ethical issue. When I was a consultant I got $X per day for meals whether I spent it all or not. Or I could eat at a nice steakhouse and pay the excess out of pocket. Under that travel policy, the allowance is simple a tax-free compensation, if you choose to not spend it all. And it is completely allowed by the IRS.

    The policy mentioned above where the excess has to go back to the company is not really a per deim. That’s a traditional expense account where you are reimbursed for actual spend. Now that I have that type of expense account I sometimes spend more than my per diem was in the first place. Not sure that is best for the company, but they are OK with it.

  2. Barrheadlass

    July 22, 2019 at 2:12 am

    When I traveled there was a per Diem but I had to have receipts for all meals. And only breakfast and dinner were paid for.

  3. FF524

    July 23, 2019 at 7:35 pm

    Simple policy. You get X per day for food. If you spend less then X, keep the change. If you spend more then X, the extra comes from your pocket. Caveating stipends with things like credit for free meals is a waste of time and moral buster. Smart folks consider per Diem the cost of doing business and if someone finds a way to keep the cash in lieu of dessert, have it it. Surely there are more important and pressing concerns to attend to…

  4. Tharos

    July 24, 2019 at 4:52 am

    I get a flat rate per diem, so “Yes and yes.”

  5. 200nites

    July 24, 2019 at 4:52 am

    Companies that penny pinch by not allowing the employee to retain the full amount are foolish.

    It’s not a picnic traveling these days and from my vantage point employees that sacrifice for the Company deserve the full amount.

  6. sholay

    July 24, 2019 at 5:15 am

    Hmmm, either you expense and get reimbursed for whatever you spent (within company limits) or you go per diem and then if you overspend you have to use your own money or underspent and keep the difference.

    In my case sometimes I am able to save a bit, sometime I overspent so I would say annualy I’m even.

    HOWEVER – I would say saving and keeping per diems is ethically OK unless it does not hurt the purpose of business trip. I mean – you falling asleep in meetings because you have not had proper meal in 3 days straight 😉

    &

  7. redrob

    July 24, 2019 at 5:19 am

    Companies can’t have it both ways. Either they pick up the full tab or pay a per diem that is yours to spend as you want. Any company policy to go down the per diem route has presumably been made to simplify matters for them and has been based on what they consider to be typical/fair meal costs.

  8. odojoe

    July 24, 2019 at 6:13 am

    While working for the Government I had quarterly trips to Newport Beach. Most of the folks making the trip would stay in reasonable hotels in Laguna Niguel at feast at meals. I preferred to stay on the water in Laguna Beach and eat at McDonalds.

  9. Jerry Vandesic

    July 24, 2019 at 7:55 am

    I had an 12 week work trip to Japan a several years ago. My employer provided a place to stay, and a $154 per diem for meals and incidentals. I was surprised at the amount, but didn’t complain. I ended up eating very cheaply, and banked the rest of the money, eventually using it to pay off my student loans. The per diem stretched even further since it was non taxable.

  10. MisterBill

    July 24, 2019 at 7:59 am

    If you needed receipts, then it’s not a per diem. A per diem is where you get a fixed amount per day for meals whether you spend it or not and do not need to submit receipts.

  11. eric0001

    July 24, 2019 at 9:44 am

    Working for government contractors is the only time I have had a per diem allowance on work trips (they were also, coincidentally, the companies that sent me on the most work trips). It saves everyone the work of processing expenses and you can often bank quite a bit of it. On most of our trips outside the US we banked the vast majority of our per diems. One of the companies even used them to essentially give bonuses to those of us that were not eligible for hazard pay and the tax-free money that in-theater coworkers earned (they regularly gave me a couple weeks of paid time off and per diem after my return from 3+ week trips as a sort of bonus). I banked over $2000 on my first trip with the president of our division, whom told me why they pay so much when we were only spending $10-15 a day on our most expensive days…

  12. rightfred

    July 24, 2019 at 6:07 pm

    When I got a per diem, I saved a fortune on accommodation and food which I kept. I travelled regularly to a few select cities. In each city I found a local B+B where I always stayed. Not only was this massively cheaper than a hotel, the accommodation was larger, more personal and more comfortable. I also ate far better than in a hotel because I ate less and more healthy food. The hotel buffet’s typically tempt you to eat more and things you would not usually eat. The company was not out of pocket and I scored, so to my mind both sides are in a win win situation. As others mentioned, I would occasionally splurge on a really nice meal at a restaurant of my choice and not be limited by what was on offer at the hotel. I was sad when the per diem was scrapped. It was worse for me and worse for the company because they then we both had far more work keeping receipts, doing all the admin etc.

  13. mhrb

    July 25, 2019 at 3:11 am

    It’s almost like people don’t understand what per diem means…

  14. Burittoman

    July 25, 2019 at 3:18 pm

    When traveling on business for my association, we were told that a per diem, if paid out as straight money, was considered taxable income. The board preferred using an expense amount NTE ~$75 or so and use it as you wish.

    I used to feel self conscious about using the amount for a splurge,but many times you are only in a city once. Why not use it to spend on the restaurant you have always dreamed of? Or that funky off the beaten path that only locals go to? It surely beats ordering room service and flipping through channels on the hotel TV.

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