Question: I just had a client ask me if I charge for travel time (I don’t). Their last writer did and that was one of the reasons they started looking for a new contract technical writer. Do most people charge for travel time? I don’t unless I’m working on the plane. Many times I’ll fly to a client’s for a week. I bill them for hotel, car rental, food etc. but I only bill for time actually spent working. Is this unusual? When I work onsite for a client that lives in the same city I don’t charge for travel time. I would consider it a cost of doing business with that client.
Question: I’ve heard the rumor from a fairly reliable source that an Independent who commutes is entitled, according to the State of California, to 36 cents-per-mile from the client. Any info?
Here are some responses to these questions:
Charging for Travel Time
I don’t charge for travel time, but I do often use the two rates (one for onsite and a lower one for offsite), so that covers the travel and “pain-in-the-neck” factor of being onsite. I work onsite so seldom, that’s it’s not really an issue for me.
I do keep track of my miles, no matter where I’m going related to business, and use the standard IRS mileage rate as a business expense deduction. I don’t charge them to a client, however.
We charge for “gate-to-gate” time if flying. We do not charge for local travel to onsite locations. However, if you are independent, you should be logging your auto travel for tax purposes.
My place of business is my home office, and if I travel away from there because the client wants me to, I figure I’m traveling on his time. You’re treating that time as overhead. For non-local travel, I charge by the day, not the hour, so the issue doesn’t come up. If I had to charge that time by the hour, I don’t know what I’d do. I know I’d want to charge every minute, gate-to-gate, as someone wrote. I wouldn’t be in that city if the client didn’t bring me there, so of course I’d want to charge him for my time.
Let’s say your client expects you to attend a meeting onsite and be there at 10 a.m. You get there a few minutes early and end up having to wait until 11:30 for the meeting to begin. What do you do with that hour and a half while you’re cooling your jets?
Does the fact that you are doing nothing productive toward your client’s project impact whether you bill for this time? I think billing for travel time is fairly standard in the industry. Think about this: you’ve called a plumber to come to your house, but by the time he arrives, your neighbor has fixed the problem for you. You still get billed for the plumber’s time to come out there, don’t you? The phone company charges you to come to your house and tell you the problem with your phone is in your equipment, don’t they?
What about the time you spend organizing your thoughts in order to start writing? I do my organizing in my head and prewrite there, too. Does that mean that time is not billable? Everything you do to advance your client’s project is billable time.
Most people I know may not charge for a certain amount of travel, but if they have to drive more than 30 minutes, they do. Or if they have to fly, they charge for that time. This is time you are unavailable to work on Client B’s project because you are doing something for Client A.
Clients are always going to tell you they want something for nothing, or they want something for less than they’ve been paying someone else. You need to decide what is fair to you.
What if you had to travel today and then they decided two days later they wanted you back? What if a client wanted you to fly in on Monday and fly out on Tuesday; fly back in on Thursday and fly back out on Friday and do that for five weeks? They could say they have a corporate jet that is making that trip on its way to something else or that since they have a corporate jet, it’s more cost effective than putting you up in a hotel. What would you say to that? That is a lot of down time.
I remember a similar discussion several months ago. The issue of local versus out-of-town travel came up. Based on that previous discussion this is what I charge now:
Travel to an onsite job 45 minutes or less on a daily basis, no charge. I am making a steadier income with more billable hours for that regular onsite contract than I would a smaller, short-term contract while I am working at home.
If I travel more than an hour, I charge half my hourly rate for the time and make sure this rate is clear in my proposal.
I do not charge my clients for travel time to go to meetings. I view that as a cost of doing business. I keep track of those miles and deduct whatever the IRS allows. However, I do not work on a client’s site at all, so my travel is largely to attend meetings.
I came from a video production background where it is common practice here in the upper-Midwest to charge half rate for travel time when the distance is more than 25 miles from my place of business. I use the same rule for my tech writing now and have not had any complaints.
One thing that been missing from the discussion about whether or not to charge a client for travel time is that (in my experience), the client may simply refuse to pay for it. “If you want the work, then don’t try to bill us for travel time.” If that’s the attitude, then no matter how valid (in our minds) the arguments are, they are pointless.
Your travel time is time you are not available for other clients, unless you ‘re working for them. But if you, for example, are piloting the plane or driving a car and are not able to do work that generates an income, why shouldn’t your client pay for that time?
But the client can (and often does) insist you cut your fee. They’ll want you to stand on your head and sing if they decide they need some entertainment and you’re willing to do that.
You are a contractor, not a standard employee. Many benefits available to those employees are not available to you. Sure, I travel to my day job on my nickel. If my company relocated farther from my home, that, too, would be on my nickel.
But on the other hand, my company contributes to my 401(K), my health/dental/life insurance and short and long term disability. It pays me to continue my college education. Right now, I’m pursuing a master’s. My company pays the tuition up front and reimburses my book expenses after the class and I have to achieve only a C. When I get my degree, I’ll get a $1K bonus. Not much and they deduct taxes, but hey, what do my consulting clients give me as a bonus?
My day-job company even pays for my STC dues and one SIG. The others I paid for. And I paid the extra bucks to join an STC chapter at my college.
Yes, there are certain things that should be considered the cost of doing business. I am just saying there are some things that should be the client’s responsibility. The things I listed above, for example, you have to pay for in full out of your own pocket or forego.
That is the advantage to the client in hiring a contractor over a standard employee.
Whatever a consultant or contractor decides is reasonable, that is something he or she should decide for himself or herself. I am not saying stick it to the client or nickel-and-dime them to death. And I certainly don’t advocate charging them for everything. But I suggest consultants set a policy based on what they think is reasonable and fair to both the client and themselves.
If you want to accept a contract that requires a lot of traveling, that takes up a lot of your time you could be doing something that generates an income. If you don’t charge for traveling, a higher per hour rate may be in order. Or, as one person stated, an extra fee. I am just saying we shouldn’t put ourselves in a situation where we’ve established we never charge for traveling and then the client expects us to do a lot of it. I think everyone should have a policy that so much travel is part of the job as overhead. But when it reaches this distance or this amount of time or whatever, then a charge to the client is appropriate.
And sure, if the travel is too much, pass on the contract.
Caution – Ask a tax accountant and a lawyer first. I am definitely not an expert in these matters…..
My first consideration is being fair to the client while keeping my own business afloat. Clients understand this philosophy and continue to give me repeat business and send others to me.
My second is keeping it simple. Setting a fair and reasonable rate that allows me to assume the expenses involved in cost-effectively running an office and local travel to client sites without having to bill separately for expenses or travel time works for me, and my clients understand the advantages to them too. The clients are usually not interested in my costs of doing business, although I’m certainly open to providing that information if they are interested.
If the client asks me to represent their company and travel to drive to another location over an hour away and during the working day (to coach or train their staff, interview subject matter experts, attend meetings on their behalf, etc.), I include mileage on the expense report and bill travel time. I follow their expense accounting and claiming rules and submit expense forms separate from my invoice for my time. I bill for every hour I actually work (which I did not do as a captured employee). (By the way, sometimes I am able to find other work to do while I am on overnight travel so that my downtime away is still billable. Or, I’m happily visiting friends, take a member of my family along, or am seeing new sights and don’t care that I’m not making any money.)
Having my own business is definitely a balancing act. For me the lifestyle advantages outweigh the disadvantages.
In cases in which I pointed out “gate-to-gate” travel time, many clients have opted to find a way around the travel. This is good because we can usually do the work in a multitude of ways that won’t include travel expenses. The consultants experience less wear and tear. The time out-of-pocket is less.
As fuel costs go up, so will travel expenses. There are many less expensive alternatives.
Charging for Commuting
This sounds like it’s been whispered from ear to ear until it lost something. The state of California has a lot of agencies. Which one said this? And what exactly does “entitled” mean? Certainly, as an independent contractor, you’re entitled to recover your costs. You can deduct them from your gross. You can charge them to the client – it’s legal to do that – but I imagine the client would have to agree beforehand.