what are the ethics of keeping money left over from a travel per diem?

by Alison Green on June 23, 2016

A reader writes:

I work for a small nonprofit. I manage a small team and my program is pretty well-resourced, though of course the organization can always use more unrestricted funding.

I travel often for work, usually on my organization’s dime. Once or twice a year, I have to go to meetings for which another, very well-resourced organization covers my flights and gives me a per diem for other expenses. Their policy is to transfer the per diem in advance directly to the individual’s bank account, rather than to the organization (I think this is to avoid having to pay indirect costs). They give a pretty generous per diem, and as I travel modestly (nothing ascetic, I just usually prefer more casual places), there tends to be a surplus, usually in the order of $100-300 for a four-day trip. In the past, I’ve used my company card when traveling for expenses and just given the whole per diem over to the organization even if my actual expenses are less than that.

But I’m starting to wonder if I can ethically (I’m pretty sure I can legally/policy-wise as my organization doesn’t have a formal policy on this) just keep the surplus for myself, and only pay over to the organization what I’ve actually spent against the company card. (For budgeting and trip planning and rewards points for the org purposes, it is preferable for me to keep using the company card for the travel upfront and then I would definitely reimburse it fully.)

To be totally frank, the trips suck, and it’d be nice to get something other than jet lag out of them. (I’m writing you at 3:15 a.m.) It’s a small amount of money to the organization but would mean something to me. I work way longer hours when I’m traveling, too– though I’m obviously exempt so that’s probably irrelevant, but it matters psychologically! And I’d like to be able to give this small perk to my staff who also make similar trips a couple times a year.

If it matters, our organization’s policy is to let us keep our airline miles from work-related travel.

Would it be ethical to keep the extra income from the per diem? And if so, do I need to communicate this to anyone above me? I basically set the current habit of just turning over the full per diem based on a suggestion from a former coworker, but other coworkers have done this differently. I’m pretty sure my boss (our ED) wouldn’t care and wouldn’t want to be bothered, though if I’m really honest I think if I asked him he would suggest we turn it all over. I generally have a lot of autonomy but since this is something from which I’d benefit, I want to ask someone objective.

And if it is something I can switch without talking to my boss, how should I communicate this to my team that they can do the same? My team is very principled so I just wouldn’t want to look like I’m doing anything shady for our personal gains.

Finally, this may be out of your wheelhouse, but if I do pocket the extra, is this taxable income I’d have to declare?

Oooh, good question.

I think it’s perfectly ethical to keep the unused money if that’s how the funding organization intended it to work, which is a pretty common way to handle per diems — but I think it becomes unethical if you’re deliberately not telling your organization about it because you think they’d tell you to handle it differently.

In general, there are two different ways of covering people’s expenses on trips. There’s a per diem (where you get a set amount of money, use it however you want, and can keep anything that’s left over), and there’s strict expense reimbursement (where you might get money in advance but you’re expected to turn in receipts showing how it was used and return any money that’s left over at the end). With the first method, the idea is that they’re giving you a reasonable amount that should cover your expenses but you can manage it however you want, and if you end up with cash left over, the thinking is typically that travel is a burden in many ways, even if those ways don’t all come with receipts attached.

It sounds like the organization that’s funding these trips is using the first method. If that’s the case, it’s reasonable for you to proceed in that spirit on your end.

But the problem is that you’re pretty sure that your employer would want you to handle it differently if they were asked. And so it would be pretty sketchy to just not mention it and do it the other way, when that other way results in money for you. (To be clear to readers without nonprofit experience, this is a nonprofit thing; the idea is likely to be that another group is providing funding to the organization, not to individual employees.)

So I think the thing to do here is to lay out the situation for your employer and make the argument for letting people keep the full per diem. Point out that the trips are difficult and involve long hours and jet lag, and that the funding organization is giving the money as an overall per diem, which usually implies “this is to cover all the hardships of travel.”

There’s a risk that they’ll say no and that you’ll need to turn over the remaining money. But ethically, I think you need to give them that option.

Taxes: Per diems are taxable unless you file an expense report that includes the date, time, place, amount, and purpose of the expense; on any amount in excess of the reports expenses; and on any amount over the per diem rates that the federal government sets by city.

Read an update to this letter here.

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{ 84 comments }

{ 84 comments… read them below }

  1. Prismatic Professional*

    I didn’t know that about the taxes! That is good information! :-)

    Also – SO travels a lot for work and has found that having things blow up when he’s out of the office, it is so much worse than when he is in the office. Being able to keep the remainder of the per diem would be a nice compensation for those times. I will mention that he could check out his company’s policy. :-)
    (Maybe view it as shift differential? Since he always has to work after hours when he’s travelling… :-p)

  2. The Cosmic Avenger*

    It seems the only reason that this is at all a question is because there are two organizations involved, the OP’s employer (Org. A) and the one paying for the OP’s meeting expenses (Org. B). I think the ethics of it depend a little on the relationship between the two. If Org. A is fully funded by Org. B, then there’s a bit more of a rationale for the excess funds going back into the budget. But even in that case, if Org. B wanted that they could give Org. B the meeting funding and let them administer the expenses however they like (by making the OP submit receipts, for example), but they don’t do that. They give the attendee the full per diem.

    I’d be interested in learning more about the relationship between the two organizations, but of course Alison is right, the OP mainly needs to be concerned with what her employer wants and finds acceptable.

    1. OP*

      Thanks! Good question. I’m the OP, Org B is not a funder of my org (Org A)– they just host these meetings and pay for all the participants like me to attend. I think Org B, which is a large bureaucratic organization, probably pays individuals because they have different rules for reimbursing organizations, which would require them to pay indirect/overhead costs.

      But yes, I think Alison is right, I should go above board and talk to our senior management team about this and clarify the policy/ advocate for being able to keep the per diem excess.

      1. Rusty Shackelford*

        Wondering what everyone thinks about phrasing it like this:

        “It’s occurred to me that although my team and I have been returning the remaining per diem, there is no official policy to do so. Since these trips are rather grinding, I’d like to give them permission to keep the entire per diem. I just wanted to make sure you don’t have any issues with that.”

        Because if you straight up say “Hey, you guys actually want this money?” of course they’re going to say “hell yeah.”

        2. Bwmn*

          I definitely agree about this.

          Coming from the nonprofit sector – being in a “poorer” organization and getting per diem from a richer one, in my experience my bosses have always been encouraging to see that as a perk they were unable to give me. Now if you see that perk as a fancy meal, upgrading your plane seat, buying souvenirs, or just having more cash from when you get back because you weren’t able to go grocery shopping and just need some more take away – my bosses (who have been Nosey McGoo’s on everything else under the sun) really haven’t cared.

      2. Bunny*

        I work for a giant organization which handles meal per diems in a similar way. It is simply handed over, no questions asked. If I only have time for coffee and a snack bar, they don’t care. The money is mine.

        This is an organization where last minute travel is very routine.

        If they don’t require a receipts, well then, take it and go.

  3. Bee Eye LL*

    I have always kept mine but if there’s any extra it may be like $10. Keep in mind per diem is not JUST for meals but what about coffee and snacks during your travels. Those $2-3 expenses can add up as well. When I am driving I will usually grab a coffee and a bottle of water depending on the length of the road trip. I also try not to eat fast food for every meal just to save money because nothing is worse than getting a stomach issue while on a trip like that.

    1. Seriously Bummed*

      This is an important point. Per diems are intended to cover incidental expenses, so the LW should be fully considering all out-of-pocket expenses from the travel, not just meals. As you point out, snacks and beverages throughout the trip. In some cases there may be tips for services, such as for taxi drivers or hotel housekeeping staff. Those are all items the per diem is expected to cover.

        1. Mabel*

          I’m going to hang on to this information because my company has given me a hard time about tips for housekeeping (for which I, of course, do not have a receipt). I’ve started calling it “meals, lost receipt” because it really pisses me off that they want to nickel and dime me over $5-10 for tips I wouldn’t be paying if I weren’t traveling (and the tips are going to someone who presumably really needs the money). I just don’t want to argue about it every freaking trip. I realize my company doesn’t have to reimburse by these guidelines, but it’s helpful for me to know that my request (to be reimbursed for tips) is not unreasonable.

          Oh, and I use my company Amex for everything – every cup of coffee, bottle of water, bag of chips, tiny peppermint patty, or whatever else I need while I’m traveling. That way, I don’t forget to submit an expense for something I paid cash for.

          1. Artemesia*

            Nit picky accounting departments drive me nuts. We were allowed 25$ for dinner and no receipt required. So everyone at a conference in say New Orleans listed $25 for dinner. Then some twit decided we were all cheated because how else would it cost exactly $25 each time. WE must be eating in New Orleans for 10$ and pocketing the ‘extra’. And they started requiring receipts with the same $25 limit for dinner. So people would provide their receipts showing $50 to 100 for dinner in a big city and have them freak out about how ‘you can only spend $25.’ We weren’t requesting reimbursement above 25, just providing the receipts demonstrating that we had at least spent that much. It took months to sort out and they went back to no receipts.

            And then there was the time I had to provide an itemized receipt from Mc Donalds because I had to prove no alcohol was consumed with the $8 meals. Sheesh.

        2. Bee Eye LL*

          Also, I went through Houston recently and it costs me a few bucks because of some toll roads. I guess that’s included, too.

    2. Big10Professor*

      If people are told they can’t keep the leftover, they will start ordering room service and such to use it up anyway. Just let it be…that’s the whole point of a per diem.

      1. My 2 Cents*

        Exactly! My organization started requiring excess per diems to be turned over to the organization because our President insisted (he was the ONLY one who didn’t hate the idea) and since then not a single person (other than the President) has turned over excess per diem because they just make sure to spend it all now.

        Don’t nickle and dime your employees when the money isn’t yours. Period.

        1. Joseph*

          “Don’t nickle and dime your employees when the money isn’t yours. Period.”
          Exactly. Returning per diem is crazy nickel-and-diming.

          When you consider (a) airline ticket costs, (b) hotel costs, (c) the part of the per diem that OP actually does spend, (d) car rentals, and (e) lost productivity during travel days, the leftover per diem money is basically a rounding error compared with the total cost of the trip.

        2. hbc*

          That’s ridiculous. I thought the whole point of per diem was that you didn’t have to do any record keeping. Just call it a spending cap at that point, especially in these days of credit cards when it’s not like you’re handing out wads of bills to your employees.

      2. neverjaunty*

        But the person asking is OP, not her boss. Yes, it would make sense to simply allow employees to keep the per diem (as long as the granting organization expects that), but that’s not the question.

        Also, no, not everybody blows through the full amount of a per diem just because they can.

        1. Joseph*

          People might not blow the entire per diem just because, but you certainly wouldn’t have employees intentionally skimping either. You certainly wouldn’t see $300 surpluses because someone had a salad or fast food for dinner, that’s for sure.

          1. Bwmn*

            This is the big point – I can’t imagine any hotel that I’ve ever stayed in where the room service would be considered a reasonable meal option – both in terms of quality as well as obviously price. However, if I’m being told that I needed to return per diem – you can bet at the very least I’d start ordering breakfast via room service if not other meals.

            I recently was in Chicago and for my return trip to the airport (during rush hour, yeah!) the Uber options were $50 minimum for a solo ride for $17 for Uber pool. I get to keep the extra money from my per diem/travel expenses – so I figured I left myself enough time for the pool and saving the extra money. But if the surplus all had to go back, then why not take the $50 Uber solo ride?

            There are lots of things that people can do to save money if they want or very easily spend more money if they have the incentive without it being about going out for champagne and caviar vs. getting a big burger and fries.

        2. Vicki*

          “not everybody blows through the full amount of a per diem just because they can.”

          Unless they’ve been told they have to return whatever is left and they decide to have a steak dinner instead.

  4. Artemesia*

    I have rarely had a per diem generous enough to have this problem; work trips always cost me BUT I cannot imagine giving any of it back if it was doled out this way. Other employees may eat nicer meals or stay in nicer places and end up paying from their pocket. If you are getting a burger king meal and having money left over — it is your money. I would not bring it up at all and I would not put the money on the company credit card.

    Where expenses are tabbed against a per diem limit of course this doesn’t arise. You present receipts for reimbursement to that limit. But if given a flat sum, you can eat granola bars and net some cash or you can have a nice prime rib and not pocket the cash.

    1. The Cosmic Avenger*

      When I was young and money was tight(er), I would go to a grocery store (not a convenience store!) and buy a couple of bottles of soda, then use the ice machine so I could have soda in my room without paying vending machine prices. And food was sometimes provided at conferences, otherwise it’s usually possible to eat cheaply if you’re determined. But now I try to supplement a nice meal with my own money and consider the per diem a (huge) discount on eating out.

      1. Ghost Town*

        I only travel for work a few times a year, but I’m the person who brings a sandwich or two with me for the plane, and maps out the closest grocery type store for picking up a few shelf stable snacks and meal replacements. Makes spending money on room service for dinner after a day of conferencing easier to swallow.

  5. Student*

    It’s extremely normal to keep the extra money. Given your somewhat unusual circumstances, ask your manager. As long as she green-lights this, keep the extra.

    It’s meant to compensate as well for slightly less tangible issues, like having to eat out instead of eating at home, extra wear-and-tear on your belongings (if you are on the move a lot you’ll need to periodically replace luggage, travel sundries, etc.), laundromat bills if you need to clean clothes while on travel, various wifi access charges, and to alleviate general travel misery.

  6. Lily in NYC*

    Interesting! I never really thought about this before. We have per diems and it is completely expected that people will pocket the money they don’t spend each day.

    1. Joseph*

      That’s pretty much the way it’s treated everywhere I’ve ever worked or even heard of. We hand you $X per day and you manage it however. But the unwritten expectation is that you do not submit any expense reports for meals or incidentals – That $X/day covers everything from the $2 I spent on coffee in the morning to meals to the 75 cents it cost to run the dryer on a load of laundry.

      Frankly, I can’t imagine a company wanting to get the money returned. There’s so much paperwork hassle. It’s also worth noting that the money returned would be basically irrelevant once people realize that’s the policy. I mean, if it’s my money, I might eat Subway for dinner…but if I’m not seeing a dime of that $30 for dinner…well, why not try that steakhouse?

    2. K.*

      Ditto. The policy everywhere I’ve worked has been “The per diem is yours, full stop.”

      1. paperwork*

        I agree, we went to per diem in order to be more efficient and cut corporate processing costs. If people turned in the excess per diem it would defeat the purpose and end up costing us more than it saves. Too much paperwork!

  7. David H*

    Please keep in mind the comment regarding taxation of per diems wouldn’t apply in all countries. In Canada, for example, per diems may not be taxable if they meet certain conditions regardless of receipts or expense reports.

    1. Jerry Vandesic*

      Even in the US the tax implications can sometimes be dealt with very simply. When I was on a long term assignment in Japan, I received something like $200 per day to cover expenses like food and laundry. I did have to fill out an expense report, but for each day I simply put “living expenses” and that was that. All non-taxable. I tried to spend very little, so after six months I had enough to pay off my student loans.

      1. I'm not a lawyer, but ...*

        What you mean is that you lied to your employer so they didn’t withhold tax. You then lied to the IRS and didn’t pay tax on a taxable amount. Simple? Perhaps. Fraudulent? I’d say yes.

        1. Cassie*

          It depends on how you define “long term”, doesn’t it? I think the IRS bases taxability off of the length of the travel and not specifically whether the person is receiving a per diem or receiving reimbursement for actual expenses. A quick Google search tells me the cut-off point is one year – I guess the theory is if you are staying in a location for more than 1 year, you are no longer “traveling” and more like “living” there? In which your employer wouldn’t be paying for your living expenses.

          But if you are stationed somewhere for, say 9 months – your travel support is not taxable because you’re still technically just “traveling”.

        2. Jerry Vandesic*

          I did just what they told me to do. I asked them if I needed receipts or to repay any excess, and they indicated that by using the government per diem that everything was set. They researched this with their travel and legal folks, so I trust that they had it figured out.

          You seem to be spouting off about something you know nothing about given your handle.

  8. Minion*

    Funny this question comes up today – I was thinking about this last week when I traveled to a conference. We get the standard government per diem for the area we’re traveling to and there’s no requirement to reimburse any leftover funds. I could take the money and eat crackers every day and keep almost the whole thing and no one would blink an eye here. I thought about it when I was traveling last week and wondered if that were really the right thing, but our policy says nothing about reimbursement and our Executive Director knows that we all keep any leftover per diem money. In fact, I had an excess of about $135, which is surprising considering I was just outside Philadelphia AND I was staying in a casino resort which is less than two miles from the biggest shopping mall I’ve ever seen. ;) Too specific? lol
    I’m willing to bet some of you on here know exactly what conference I was at and which casino resort I stayed at. :)

    1. Victoria Nonprofit (USA)*

      Hey, that’s my (former) neck of the woods. I’ve done lots of running around the VF loop.

  9. AK*

    My workplace provides per diems for food when staff travel – $15 for breakfast, $15 for lunch, and $30 for dinner. Due to reimbursement policies, it’s much easier to claim the per diem (e.g. I was away for two days and one night, so I can claim the per diem for 1 breakfast, 2 lunches, and 1 dinner), rather than providing receipts for the exact amounts I actually spent on each meal. This allows me to spend that money on whatever I might want – snacks, actual meals, whatever.

    The assumption is that the per diems stand in for the amount of time you were away, and if you choose to spend more than the amount provided, you pay the difference. If you choose to spend less, then you get to keep the balance. Nowhere is that stated explicitly, but it’s completely implied in the way the policy and the reimbursement process is designed. However, it would be almost impossible to ‘save’ more than $20-$50, so I’m guessing it’s the amount of money the OP is saving that pushes this into an ethical grey area.

    Maybe the OP could just start paying for everything on their own credit card? Then they would get to keep credit card rewards points as well as air miles, etc. And then the employer wouldn’t be able to find out exactly how much was spent or how much was left over.

    1. knitchic79*

      It sounds like the OP us getting a per diem to include hotel, they mention staying at more modest places. If you’re receiving enough to cover hotel and food it’s not completely impossible to save that much.

  10. De Minimis*

    I work for a small non-profit as well, and we have this situation at times–employees travelling to an event where some or all of their expenses are covered by the group sponsoring the event.

    For us, the only time the employee has to pay us anything is if they use the organization’s credit card for charges that are personally reimbursed by the outside organization. I guess if there was ever a situation where they were getting a per diem from us and also from the event organizer they would pay those back to us, but I haven’t seen that happen yet.

    We don’t run into it much for things that would normally be covered by a per diem, though, because much of the time at these events all of the meals are provided.

    For us the relationship to the outside group is usually they are our funding organizations, so it’s a grantee meeting.

  11. Al Lo*

    I run a youth touring program with my organization, and a tour is often some of our junior high students’ first experience with per diems. We do some meals as a group, but on free days, they get cash for meals, and for the whole tour, it comes out to about $250 total, given the number of meals it covers. I always get the question, especially on our Disney trips, “So… if I don’t spend it all on meals, can I use it for more souvenirs?” The answer is yes. But the answer is also that their chaperones will keep an eye on them to make sure they’re actually eating properly and not just hoarding the extra money.

    However, we do occasionally have kids who leave with more money than they came with, because they’re frugal in their souvenir spending and don’t use all the meal money. This time, we had meal vouchers for some of our per diem, which could be redeemed at Disney vendors, but didn’t give change, so we ended up with a bunch left over. There were kids who were selling their unused ones to other people (who would use them) on the last day or two for face value, so there was one who ended up with quite a bit more money than she came with.

    1. TootsNYC*

      In this case, is that money essentially coming from their own fees that they paid?

      Or is it the organization’s money?

  12. Noah*

    As an employee, I prefer per diem. Less worry over keeping up with receipts and the worry of how a nicer meal will look. I figure it all balances out in the end. Some days I end up with money left over, some days I end up spending more. Definitely consider all the little expenses. If I’m on a longer trip I need to have clothing laundered or dry cleaned and that is included in per diem as well.

    The big hiccup here is that org A is giving you per diem but you are then using a credit card for expenses from org b. If you want to use the per diem, I would ask if you can just do that and not use the corporate card at all during these trips.

    1. the gold digger*

      I wouldn’t mind my per diem if it were enough to cover a nice meal, but $30 for supper in Chicago or other “expensive” cities (it’s less for other locations) doesn’t get you far.

    2. OP*

      Thanks Noah, this is a good point. It is really tedious/ not a good use of staff time to deal with expense reports. I will discuss and see if we can just move everything over to the personal realm, and forego the corporate card and expense reporting and reimbursement all together.

      1. De Minimis*

        When I was a fed the per diem was adjusted based on the location. Higher COL areas gave a higher per diem [DC was the highest anywhere.]

        1. AcademiaNut*

          When I worked for NASA, they had an insanely detailed table for international and local per diems. At the time, I think London was one of the highest. They also included things like being able to claim up to $10 for phone calls home (this was when cell phones and hotel internet were less standard).

          In grad school they simply had national and international rates (the Canadian dollar was pretty low at that point, so the local rate didn’t go far in the US).

  13. Elle the new Fed*

    “The big hiccup here is that org A is giving you per diem but you are then using a credit card for expenses from org b. If you want to use the per diem, I would ask if you can just do that and not use the corporate card at all during these trips.”
    I agree with this statement so much.

    When I used to do work for a big, government organization that gave a lot of non-profit funding, they preferred the per diem route because it was the easiest to reimburse/front.

    So they’d give me $100 for hotel per night… I could stay in a place that was $250 and front that extra $150 a night, or I could keep the extra $20 a night if I stayed in an $80 hotel. I never felt bad about keeping the extra and sometimes I’d use it on a nicer meal than the $30 a day food per diem would allow.

    1. esra*

      Yea, same here. I’d feel weird about keeping it if I were submitting things for review on the company cc. But if it’s money up front, I’d spend as I felt and keep the rest.

  14. Former Retail Manager*

    I find it odd that you have been working for this organization and traveling for quite some time and they have never directly informed you, either verbally or in writing, that you are to return any excess per diem, regardless of who is paying out these funds. This is clearly a recurring issue. This seems to be new hire 101 type stuff.

    Quite frankly, I’d bet that if you ask, they’ll tell you to keep it. Why? Because the funding organization is likely writing off (i.e. deducting for tax purposes) the full amount of the per diems paid out. Either way, I’d ask, but I’ll be surprised if they were to tell you to return any portion of it.

  15. Ann O'Nemity*

    It’s funny how per diem policies can make a big difference in the way you feel about work trips and about your employer.

    My current employer gives the standard government per diem and doesn’t care how you spend it. No receipts required. I could spend the whole thing on Snickers and vodka if I wanted to. Overall, I’m happy with this method.

    My last employer made us turn in receipts AND had a low cap on the max per diem. It was barely enough to eat cheap fast food, and I regularly had to pay out of pocket. Overall, I was very unhappy with this method and actively tried to avoid work trips.

    1. DoDah*

      Was your last employer–my last employer? 10 breakfast–10 lunch–15 dinner. AND receipts were scrutinized by FOUR people.

    2. zd*

      I worked for a small nonprofit that didn’t reimburse anything for food or other expenses. Hotel and airfare, ground transportation only if it was public transportation. Any cabs (even if it’s because someone else bought a flight that had me landing at 10pm) and all meals all came out of my own pocket. AND they would nickel and dime us on everything on top of that, make us fly at crazy times for a savings of $100.

      And they probably don’t make any connection between that, and high turnover, and the fact that the organization has basically gone under.

  16. Traflinger*

    When I was in grad school I would adjust the days of per diem I claimed to cover my actual meal expenses. It felt like the right thing to do in my student mind, and it let me stretch my fellowship’s travel budget to cover more trips. (Which was, after all, the best thing about grad school.)

    Now — heh. I just got asked if I can cover an overseas assignment for three weeks. Aside from 48 hours of plane travel, when I’m not eating, sleeping, or driving I’ll be in windowless rooms talking to people and taking notes. A couple grand in tax-free per diem is probably the only bright point, and my guilt over taking it all will be non-existent.

  17. Thoughts*

    This reminds me of paying back jury duty payments from the courts. Some companies require you to give them your jury duty payment if they offer jury duty pay. Some companies don’t. Usually it costs more for the company to process the small check from the courts than it’s worth. Which may be true with these per diems.

    1. Artemesia*

      My jury duty parking costs more than the ‘pay’; I would have been pretty torqued to have to turn over the check. I did defer the jury duty so that it didn’t occur when we were at a critical time at work.

  18. Dynamic Beige*

    Actually, there are three ways.

    1. per diem which may or may not be limited to meals and incidentals, not parking or mileage, depends on client/situation. If you don’t spend it all, you get to keep whatever’s left over. In my industry, sometimes people give per diem to cover meals and incidentals but then the client has to buy us meals anyway because there is not time to allow everyone to go away for an hour and buy their own. (it’s a long story of why this happens)

    2. cash in advance that they give you but want the receipts and extra funds back (which isn’t really per diem)

    3. keep the receipts for whatever you buy and expense them back — no money up front

    Most of the people in my industry are either pretty frugal or just not fancy. So they rarely spend all their per diem (when they get it) because they will go to a convenience store or eat at Subway instead of room service.

    While it’s very generous of you to sign over your per diem to your organisation, if any client ever said “this per diem (which we literally receive on site as cash in an envelope) came from the client, but I want you to spend your own money, expense back to us and I’m keeping this for our company” I would give them such side-eye and start looking for other ways they were cutting costs, nickel and diming.

    Seriously, the reason they put it in your bank account — not the company’s — is because it’s yours to spend as you need/see fit. If the other company was interested or concerned about how your expenses went, they would want receipts and would issue spending guidelines on what was acceptable such as “dinners may not be over $40, you may not purchase more than 2 bottles of wine with dinner and they may not be more than $20/bottle.”

    1. Poohbear McGriddles*

      I once had a job that did option #3, but didn’t put limits on spending. After a couple of really nice $70 dinners for one, lo and behold we changed to a per diem system.
      In the OP’s case, the funding organization has budgeted a certain amount per person. They aren’t expecting any leftover funds back. So if the money goes back to the employer that’s where it will stay.

      1. Artemesia*

        We had fairly lavish meal allowances when recruiting and that all disappeared when my jackass boss had a lavish night out with high priced wines, cigars and general piggery. Then it was embarrassing to be trying to recruit people on the pathetic budget we got for wining and dining.

  19. Mel*

    You’re thinking about this waaayyyy too much. This is no different than folks who get a car or phone allowance. Would it be fair to you to get less simply because you spend less? this is like asking if it’s ethical for you to be thrifty when that’s not expected.

  20. Rusty Shackelford*

    I work for the government, so we’re paid a per diem that’s meant to cover food, tips, and other incidentals, but not travel/parking. We don’t even have the option to “give back” any of the per diem that we don’t spend. I didn’t think anyone could be more… thrifty than the government, but I guess I’ve been proven wrong.

    To me, the facts that (a) no one told you this is the official policy and (b) other employees keep the entire per diem both indicate that there’s no official requirement to turn it in, and you should be able to keep it. But that’s just my own sketchy morals talking.

    (Or you could just be sure to spend it all, and make it a moot point. I like Ann O’Nemity’s Snickers and vodka plan.)

  21. Dan*

    I see a lot of rationalization going on here. Usually, when I see that much, I think “you’re doing something wrong and you know it.”

    But TBH, I don’t think your direct employer has an ethical claim to these funds at all. They’re earmarked for you by an outside org. As others have pointed out, you muddy the waters by using your direct employer’s credit card and handing over your money to them.

    It would be much cleaner if you just used your own credit card, and didn’t inform your employer of how much money was trading hands. I bet your accounting staff would perfer less headache.

  22. Stephanie*

    Per diems can be less costly to an organization than requiring receipts that have to be reviewed and approved. You save on accounting/bookkeeping people’s time. Sure, sometimes the organization pays more than it would have to you, but the total cost to the org of the trip also includes the amount of time and effort for people to collect proof of payment, complete forms, review receipts and forms (sometimes by multiple people, e.g., supervisor and accounting/bookkeeper folks), etc. They’d rather pay you $10 more then you spend in order to avoid paying $20 to check receipts and issue you a check.

  23. NJ Anon*

    We pay $40 Per day. I tell staff it is the one and only time I don’t need receipts. Do whatever the hell you want with it!

  24. Aubergine Dreams*

    I think my solution to this would be to stop using the company credit card, use the per diem as I see fit, keep the excess, and then there’s no exchange between you and your company. If you don’t have to file an expense reimbursement for the credit card, you don’t need to turn in receipts, your company doesn’t know what you spent, and the whole issue is moot. I think the added step of using the credit card and then turning in your receipts and turning over the excess only creates more work for you AND the company, and I don’t think that’s how per diems are expected to work.

  25. neverjaunty*

    OP, your letter is kind of reminding me of conversations I had with my kids when I was younger, when I told them it was not OK to sneak extra cookies or have ice cream right before dinner, and they’d say “But if I asked you, you’d just have told me no!”

    AAM is right that it may be that the per diem is an allowance rather than an expense reimbursement – but that’s something you need to confirm, not assume (because, as you acknowledge, you’re not unbiased here). Present your case for keeping the extra to your boss, AND perhaps suggest that your organization have a formal policy on the matter, as you can’t be the only person who will ever be in that situation.

  26. OP*

    Thanks everyone for the thoughtful input. It sounds kind of obvious now in reading through my original post and the responses that, after discussion with the higher ups as Alison recommends, the most logical thing is probably just to take everything into the personal — both the credit card spending and the keeping of the per diem. Just to clarify why we’ve been doing it on the company card to date– this is for an international city that can be quite expensive. It’s sad to actually think about it but a lot of times why I have leftover $ is bc I’m too tired from jet lag and working long hours to go out to eat! Anyway, we’ve done things on the company card as there’s always a chance the costs will exceed the per diem–especially as I’m not sure if my employees get charged foreign transaction fees on their personal cards– and I do think my org should be responsible for covering work-travel-related costs in excess of the per diem. So it just seemed easier/more fair to do as we normally do and charge travel expenses to the work card, whether they were more or less than the per diem, and then reimburse the organization. I do think it’s making more work for everyone, and that the perk of keeping the excess would be nice to have, so I will take this up, and let you guys know how the conversation goes!

    1. sarita_f*

      Hi there OP. In this specific instance I can understand why you allow your employees to charge to the company card. When I worked for a Big 4 accounting firm the policy was you can charge government per diem on a per meal basis, and any meal that exceeded the per diem could be expensed on an actual basis. So we got the best of both worlds, which was really nice. In practice those large meals were usually group meals where one person paid, such as a manager ordering group dinner when we’re working until midnight every night during busy season. Those group meals are VERY common in the B4 world as it’s uncommon for anyone to work on a travel assignment solo. If you were the recipient of a group meal you couldn’t also charge per diem for that meal, although I know of times when I accidentally did so or a partner or manager advised us to do so (this was probably unethical since most of the time we were passing costs through to the client).

      Also ordering room service while working on workpapers at night in the hotel was common, and room service usually blows government per diem rates out of the water.

      The corporate card was technically to be used for work expenses only but the balances are always the direct responsibility of the employee to pay. And required support for all actual expenses beyond $25 was a receipt. A credit card statement could be supplied if you lost the receipt but you had to fill out a form for each and every missing receipt.

  27. Cassie*

    I work at a state-funded university and for domestic travel, our standard policy is to reimburse actual expenses for lodging and meals. There is a cap on meals of $71 per day and the policy specifically states that the meals allowance is NOT a per diem. Receipts for meals aren’t required, but accounting will question it if your meal expense is $71 every day.

    For foreign travel (plus Alaska and Hawaii) – technically we can reimburse either actual expenses or give per diems for lodging and meals, but apparently the “right” way is to give per diems (reimbursing actuals with receipts would be considered an exception). We use the per diems set by the US State Dept and there are a lot of locations where the per diem is higher than what the traveler would typically spend. In that sense, they are free to keep the overage – I guess it’s a “perk” of being required to travel internationally.

  28. Jennifer M.*

    A little late to comment (I’m on a business trip out of the country so time difference is in play), but thought I would mention my experience with per diem. I travel on federal contracts and I am held to the Dept of State foreign per diem rates. They are broken into two pieces: Lodging/Meals & Incidental Expenses. Lodging is spend to get (meaning I am only able to expense the actual amount) and must include all taxes. M&IE is flat rate meaning I get to keep it. IE portion has to cover tips, snacks, laundry, taxi to a restaurant, etc. Also, as I am not a gov’t employee, I can’t force a hotel to give me the gov’t rate so in most cases the IE also is to cover overage if I can’t find a hotel within the lodging max (though we are generally able to negotiate corporate rates equal to or less than the gov’t rate). The per diem is based on market conditions and assumes a hotel of a certain level of accommodation and security (for example the lodging rate for Afghanistan is $0 because you have to stay in a secured compound which is billed to the gov’t as monthly rent) and eating all meals at the hotel (ie it is usually pretty high). So right now I’m in a country with $93/day M&IE. I’m spending probably closer to $30. I’ll have to do some laundry this weekend and hotel laundry is pricey. But at the end of this trip, I’ll have a decent chunk of change to keep. But it will also generally offset the stuff I bought for this trip that I couldn’t expense – granola bar stash, ZZZquil for jet lag, plug adapters (which if I gave to my company I could expense). It will also buy me a new Kindle and go towards the new blinds for my bedroom and guestroom.

    The big differences with per diem rates in the continental US (CONUS) is that they are set by the GSA and hotel taxes are not included in the lodging max and can be expensed separately. I don’t remember the reg, but I did once find a loophole that said for a CONUS trip, if I was in a hotel for 4+ nights, I could expense laundry as a separate line item, but that was 10+ years ago.

    1. Jennifer M.*

      Edited to add that other than breakfast included in room rate or a meal on an airplane, if I am attending an event that is also being billed to the government and am provided a meal (Breakfast, Lunch, Dinner only), I have to reduce my M&IE for that day by a specific amount (found on the GSA or State Dept websites) because the government can’t be billed for the same meal twice.

  29. Soupspoon McGee*

    When I worked for Dysfunctional Academic Madhouse of Nitwits (DAMN), we had to front the costs of meals, then provide receipts if we were requesting reimbursement for meals greater than $20 in a single day. You’d better believe that I gave them a pile of receipts for every snack, bottle of water, and cup of coffee I had.

  30. Steve*

    Someone has the martyr syndrome all too common in the nonprofit sector. It’s actually a huge pet peeve of mine and plays a huge role in why I tend to become quickly annoyed with folks who act like that.

    Regarding taxes, why would you get an advance into your personal account over the government specified rate? That’s just asking for trouble. We can get a cash advance for direct business expenses (because we often go to parts of the world where using cards isn’t an option) but it’s signed out in person and we have to get a receipt for every bit of it that is spent. The rest goes back in the petty cash fund. We get the GSA (or State Department for overseas) “meals and incidentals” per diem rate since the company pays for hotel rooms. Anything left over is ours. No sleep is lost over that in the slightest.

    Actually there’s a bit of a running joke about it thanks to the TV show Archer. There a scene where the title character is stripped down to the waist, pouring champagne on a couple of scantily clad ladies of ill repute and lighting a cigar off a burning $100 bill. One of my friends (at another organization which does very little business travel) has it with the words “WOOHOO! PER DIEM!” as the desktop wallpaper for his computer.

  31. ArtK*

    Anecdote: Years ago my company sent us to a conference in New Orleans. At the time, we were on per-diem. One group of people decided that the way to get through this was to eat as frugally as possible and pocket all of the excess. Nothing unethical about that, but, they were eating at McDonald’s on one of the world’s great culinary cities! I ended up losing money on that trip because I ate out. I just couldn’t understand giving up that great food to make a couple of extra bucks.

  32. Andy Carney*

    I just wish my company had per-diem rates that are the norm for 2016. Anytime I am forced to go out of town I get pissed. The type of work we do is surveying in mountains which is tough work. I was hired on as an IT guy but due to short staff and being a small business I am regularly sent out to help field crews.

    We get $20 for travel days. This typically means leaving at 8am traveling then working until 6-8pm. On non-travel days we get $40. For a weeks work I typically buy 1-2 cases of water along with ice which is normally around 10$.

    I typically lose money because I like to eat decent food and have snacks and such because the work is hard on me and being away from home is inconvenient. I am getting pretty fed up with how this company deals with per-diem so I am going to be as frugal as possible to break even. I have a trip next week and I figured out I have 32$ per day to cover meals, drinks, snacks and tips.

    The govt per-diem rates for my state and area are $51-54 and 75% of that on travel days. This would be exceptionable to me. I do wish the type of work was considered — Surveying 12-14 hour days is a lot different than attending meetings or doing office work.

  33. OP*

    Hey everyone, OP here. Just to follow up, I discussed and got resounding “okay” for myself and my reports to just keep the per diem and handle expenses personally. It’s a win-win, we get to keep a little cash and avoid expense reports, and the organization doesn’t have to deal with administrative side.

    Thanks!

  34. Terry Thompson*

    I worked out of state for six months and didn’t get no per diem I ask boss about it and he said ok I will make sure you start getting it and I am BUT he dropped my pay three dollars

  35. Hotel*

    These are such great tips! I already follow some of those myself but will definitely keep the other advise in mind whenever I travel

  36. Brandon Ott*

    A family member stays away from home for months at a time. His employer jokes that they are in the per diem business because they charge thier clients rediculous travel rates and do not pass them on the the staff. Here’s the kicker they call it per diem, but the money never transfers to the travelling staff. They also make these guys share rooms, etc. This sounds very shady, but I cannot find anything about this particular use of per diem. Anyone have any ideas?

  37. Leon Kennedy*

    Know this is a old article but I recommend never take a job that does reimbursements over per diem doing Government related work. For one, the Govt. gives you per diem to begin with, what you don’t use you keep. Your employer is pocketing money unspent that is yours. Does this sound right?

    I worked for 2 govt. contractors.

    The first gave the standard government per diem rate. Didn’t care how that money was spent.
    You only showed receipts for hotels/airlines/car rental not food. I could buy alcohol and they would expense it out. Amazingly.

    My last employer made us turn in receipts AND had a stupid low cap on the per day reimbursements. No per diem.. It was a pain in the ass. If your meal had alcohol on it they wouldn’t pay for any of it. Had to do seperate checks. If they didn’t know what something on a receipt stood for from a grocery store they wouldn’t pay for it. Took months to reimburse you. Would never do that again.

    If they won’t offer per diem tell them to fck off

    1. Leon Kennedy*

      The best thing with per diem, what you don’t use you get to keep.
      Lets say per diem rate is 54 a day. Thats 378 a week. Most people aren’t going to spend 54 a day on food. Lets say you buy 200 worth of grocercies to last a month…you just pocketed around 1300.
      How first employer was.
      If they do reimbursements…….they are pocketing that 1300.
      Fck that.

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