
Ask HN: Average Startup per Diem Rate? - quest1
We have a 10 person startup including 3 sales agents who travel a fair amount within their local region. While on business trips a fair amount is being expensed: meals, drinks, snacks, newspapers.<p>How should a startup calculate a reasonable per diem rate for sales associates? Is is typical to expense every single purchase while traveling for work?
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davismwfl
A good starting point is the federal guidelines
[https://www.gsa.gov/travel/plan-book/per-diem-
rates](https://www.gsa.gov/travel/plan-book/per-diem-rates). Just remember
there are separate per diems for meals/incidentals and lodging, where travel
is always 100% reimbursed or paid up front by the company (which I suggest you
do). And I will tell you, that the lodging rates the GSA uses are low in my
experience, for example, LA is easily $200/night with taxes etc to stay at a
decent place that is close to businesses, but the GSA lodging for LA says
$180/night. You can do < $180 to be fair, but many times to be near clients
and not eat up travel time and car fees etc, it is a low amount for lodging.
In other parts of the Country it is on the high side, but not crazy either
way.

Not saying that is the end all of resources, but it is a place to start. Per
diems are nice, as a consultant I used to make good money on the per diems,
because usually I could do better on my expenses when I traveled. It does save
a lot of money in terms of reimbursement management from the company side so
that is a trade off, but if you are pinching every penny, I'd do
reimbursements and put people on a reasonable budget when they travel, e.g.
explain that no, the $100/steak dinner won't be covered as that is excessive.
I can't remember the specific wording on this, but you can check with your
payroll provider or attorney on it, but you can limit people from excess when
doing reimbursements. And you may want to check with the attorney or
payroll/tax person as well, because it used to be (and I don't know if it
still is) you could set a per diem and/or do reimbursement. What that meant
was that you can say you reimburse all expenses up to the maximum of the per
diem rate, but I am not sure if this is still ok to do, but I worked for a few
companies with this rule and it was fair IMO. At the same time, you should
obviously exclude client events, e.g. your sales person takes the client to
dinner, that's obviously excluded from the per diem or limits.

The one thing to be really careful of, don't tell people after 5pm they are on
their own time so the company doesn't cover them, that can get you into
trouble if they file a complaint (typically with wage and labor board in most
states). If someone is traveling on business for your company, even if that
means over a weekend or typical company holiday, they are to be reimbursed for
all reasonable expenses, or are eligible for a per diem. When I ran my
consulting businesses I just gave a fair but higher per diem and said screw
it, just made life way easier. Easier to budget and plan plus in our case we
could pass the cost on to the client (so we didn't make it crazy either). When
you are doing sales, the costing isn't as clean but a per diem does help
budgeting as you are learning the process.

