Career Path > Money Matters
PER-diem verses pay
jobsandwich:
--- Quote from: BeerCourt on Feb 28, 2007, 06:20 ---Why not both? You should get the pay that the market demands for your services. If you have to travel for your employer, they should pay your expenses at a reasonable and customary rate.
The question isn't per diem OR pay, but why aren't BOTH higher?
--- End quote ---
Per diem and pay are both the same thing "the price of a tech" If they pay it and you come, they have no reason to pay more. Call it what you want a $ is a $ and it's how many $ it takes to get you there...and nothing else. But yes if there is no diem you can only deduct actual expenses and that will cost you. Want more money, sit out a season...yeah right!
hamsamich:
I agree with most of your post Troja, but i think you are wrong about nobody working without Diem. I would work without Diem, as long as the hourly pay-rate was higher so as to make up for it! And that is my point, if I made, say, 35$/hr instead of 25$/hr, it would work out just as well for me. And then i would just write off my expenses on my taxes which would be just as benificial as Diem, but with more hassle for a guy like me, because I hate keeping track of stuff.
Another reason I think Diem is truly pay. If the IRS has a problem with you getting Diem for many different reasons, they will identify it as income and tax you for it. Yuck!
semantics, yep.
RDTroja:
--- Quote from: hamsamich on Mar 01, 2007, 03:03 ---...if I made, say, 35$/hr instead of 25$/hr, it would work out just as well for me.
--- End quote ---
If you are willing to give up $700/week for $10/hr you are just about going to break even (depending on your tax bracket and how good your accountant is) at 6/12s and ignoring short weeks and training weeks. You are voluntarily taking a real pay cut... no thanks for me.
But the real issue is the reason companies are willing to pay per diem rather than pay more. It is a huge difference to them which pot the money comes out of when they pay you because of their taxes and the ability to claim expenses against income. I am certainly no expert but you get into capital vs. non-capital money and depending on the status of deregulation you also get into what can be recovered from the rate base, etc. It is an accounting thing... and that carries more weight than anything except motivating all those electrons.
--- Quote ---Another reason I think Diem is truly pay. If the IRS has a problem with you getting Diem for many different reasons, they will identify it as income and tax you for it. Yuck!
--- End quote ---
By taking the pay instead of per diem you just saved the IRS the trouble of deciding whether or not it should be taxed. IF they rule for whatever reason that it is pay and decide to tax it, then you lose -- but why volunteer to give it to them? Again, no thanks. If it is true that the only thing that really matters is number of dollars in pocket, you have to get a lot of taxed pay to make up for loss of untaxed per diem. Personally, I will take the per diem, thank you very much.
hamsamich:
it may be a pay cut, but very small. you would be able to write off alot of your work expenses because you weren't getting perdiem, so 10$ an hour might be a raise depending on the diem rates and how much you wrote off. AND you would max out unemployment better and faster, although this would only be helpful to those of us that only work 5 or 6 months out of the year and worry about filling quarters. That has to be taken into account here for lazybones like me.
But i'm not talking about 10$ an hour specifically. The point is a dollar is a dollar and I think it is only terminology that seperates diem from pay. In my reality, I do a spreadsheet to see what plant wins.
I'm not saying I volunteer to give the IRS my Diem, I was talking about a hypothetical situation for most of us. I brought it up merely to argue whether or not diem is actually pay or not.
SloGlo:
--- Quote from: hamsamich on Feb 28, 2007, 10:27 ---not true, some people are offered jobs with no per diem AND they get no travel pay. there is no reimbursement for some people. that's what i'm trying to get you to understand.
per diem is money distributed to workers so they do a job.
--- End quote ---
people who travel for jobs that do not get compesated for their expenses while traveling make a virtual killing at tax time. they will claim every freaking dime they spent and get the credit against their income. if they don't due this, it's their problem. it got nutting to due wit those who get diem, or those who get compensated for their expenses incurred by the employer. iffen they travel fer $8/hr 'n no expenses, i shood shed a tear? pardon me, while i paws fer dat cause. ok, done wit that emotion. ;) per diem is an auditing short cut. it is for expenses incurred. it ain't no stinking income. you wanna argue it's income, go tawk to da i.r.s., they'll be happy to tax you for it. when they do, don't whine about having to come up with an extra $10k fer da taxman, cause i won't wanna here it either.
perdiem has nutting to do wit doing a job. it has everything to do with maintaining your necesstites while being away from home 'n hearth.
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