I don't normally travel for work but I have a long time regular client who has talked me into it. I have no idea how to bill for my non working time while I am out of town.
I know I will give them a bill for my hours worked and a bill for the money I have to spend on travel expenses but what about the time I cannot be at home and I am stuck in a hotel in a city I don't want to be in? Do you charge your regular hourly rates 24 hours a day while you are gone? For example if the billing rate is $100 per hour and you are gone a total of 48 hours, do you bill $4800 for that time or do you only bill $100 per hour for time spent working?
Any advice on this will be greatly appreciated.
If i was your customer, I would be pretty appauled to have to pay you to sleep in a hotel room that I am paying for. It's like getting paid twice. So you may want to choose which you would rather do.
I didn't travel, but a company I worked with did job's out of town. They covered the cost of the hotel and per diam by adding to their hourly rate, and charging extra for shipping of material's and things. They never had a line in there for the travel and hotel cost, they built it into the hourly rate and materials cost.
Another thing they did was a milage charge. For every mile over 50 miles was X per mile. Another thing that you could use think about. That way you are at least getting your milage taken care of. Most don't bat an eye to a dollar or 1.50 a mile.
There are opportunity costs associated with traveling for a client and I am not sure how to bill for those costs.
It does suck because you are out of town. Premium rate could be 20 to 50 % higher than your usual rate.
I travel a lot for work. In 10 years, I have MAYBE done something vacation like 3 times when I am on the road. It is work and it needs to pay me accordingly.
Do you travel for a company or do you send a bill yourself?
I think if you travel for a company, you are compensated with your salary and it is an expected part of your job.
It is a good client and they wont mind paying but I want to be fair for all involved.
Calculate your gross annual salary you expect to earn, and figure it as an hourly amount by dividing by 2080. 2000 is close enough.
Multiply that by 2.5, and that is your bill rate. That's an old industry standard from the 90's; it might be a bit different now, but I don't think so.
This seems high, but as a self-employed person, you have to pay for unbillable hours, retirement, healthcare, and overhead and administrative costs.
Bill only for the hours you work, but also invoice for all expenses. Most clients will pay hotel, airfare, and a per-diem that varies by city, and the US Government has a website showing what they pay in those cities. Some clients will only reimburse for meals with receipts, up to a limit.
Bring a good book for the hotel. If you do this a lot, take up a hobby you can do on the road, like crochet, cross stitch, ukulele, harmonica, ham radio...
I have heard of one independent contractor who bills for his travel time, but not his hotel time. He's the exception.
The knowledge workers I know often use hotel time as billable hours. They use their laptops and work after dinner. I can't do that for various reasons, one of them being that after 12 hours my brain shuts down.
I do try and work on reports and other computer work during travel.
Of course the client pays all travel expenses.
“Many of us crucify ourselves between two thieves - regret for the past and fear of the future.” -foulton oursler
Thanks for the tips. For my work, I have to be onsite to bill so I cannot use hotel time for billable hours.
I already have an hourly rate and they are happy with it. From what I can tell, people are advising that I charge a larger hourly rate for working hours only. I still think it's a little unfair to me because I cannot work on a 5 hour plane ride so that is just my time down the drain. I think I should bill something for that time too but I am so unclear.
Do you charge more for travel work?
So you charge for time sitting on plane but not time in hotel?
my job is travel based. i do have one day a week that is a non-travel day week usually. I bill the same for either but that is the nature of the job. I would consider a small premium if you don't normally travel.
Yes I bill for plane time but not hotel time. For a lot of jobs that require regular travel the hotel is considered being at 'home'.
One of my contracts explicitly states that I will try and do some work like reports during travle time. I forget the exact phrasing but its basically saying that I won't just nap on the plane, I will write reports and do other follow up when possible.
[This message edited by hexed at 9:46 AM, August 28th (Wednesday)]
I could only bill for time actually worked. I reported productive time on planes and in hotels, and that's it.
In planning, we never used 2080 hours - vacations, illness, training, holidays, and miscellaneous hours (company meetings, for example) can't be billed for. We figured about 15%-25% of the year would be unbillable off the top.
For consultants, we had to figure in bench time, but that was hard to evaluate, because it could be used for other purposes.
For an independent, you also have to figure marketing & sales expenses - unless you have someone selling your services or unless you do something that's in very high demand, I suggest figuring on topping out at 1000-1200 billable hours a year.
Don't forget to account for the employer's half of the employment tax....
I think the two biggest mistakes you could make is to a) not have these issues clear with your customer before setting off and b) being too afraid of losing his business. Spending all this time away from home, the added costs, the time away from other customers… The income has to make this all worthwhile.
Agree that you could negotiate travel time, some sort of rate for that.