Disbursements guidelines

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1 Disbursements guidelines Benchmark hourly rates and expenses Hourly rates, travel expenses and travel time, motor vehicle mileage, travel accommodation, meals and incidentals for Professional Engineer contractors and consultants Unlike employees, consultants generally cover their own costs and expenses. Where feasible, expenses should be factored into the contractor s base rate or total project cost at the quotation stage. There may also be times when it is necessary to attach a Disbursements schedule to the terms of engagement to account for incidental costs. This information is intended to guide contractors, consultants and their engaging clients on benchmarks for calculating hourly rates, travel expenses, travel time, motor vehicle costs, accommodation and meal expenses to be included in a total project charge or disbursements clause. Contractors and consultants should note that where they need to satisfy the PSI Results Test, Hourly rates and/or Disbursements clauses can be regarded by the ATO as indicators that payment is for work performed rather than producing a result, and that the contractor s exposure to commercial risk limited. If PSI is an issue for you, you should consult with an Accountant or Solicitor before including any form of Hourly rates or Disbursements clause in your terms of engagement document. Where a contractor includes a Disbursements schedule in the contract documentation, a clause should be inserted clarifying that the relationship is one of client and contractor in spite of the inclusion of a Disbursements clause. Contractor hourly rates The contract engineer does not have access to annual leave, sick leave, paid public holidays, long service leave, superannuation, jury leave, compassionate leave, family leave, professional development and retrenchment/redundancy provisions. They must therefore take such provisions into account when determining their base rate. To view the current recommended contractor hourly rates, visit the Contractors and Consultants area of the website and click on Recommended contractor hourly rates. The rates do not include GST. You may also need to factor the following expenses into your base rate or project quotation: legal and accounting fees; ASIC fees (depending on the type of business structure used); debt collection fees; computer software and hardware upgrades; computer maintenance contracts; motor vehicle finance/depreciation; newspapers; office contents insurance; advertising; computer consumables; stationery; postage;

2 reference books and journals; subscriptions (including ISP/Domain Name); professional association subscription; electricity; telephone; motor vehicle insurance; motor vehicle registration; motor vehicle fuel costs; and motor vehicle repairs and maintenance. Meeting costs You should nominate a figure for the number of meetings at the client site in your contract terms and this should be factored into your base rate or total project cost. The terms of engagement should also include a clause stating that additional meetings will incur a claim for extra time and travel expenses. Additional meetings should be charged at full rate as set out in Table 1 plus travel time. Travel expenses It is appropriate that the cost of travel incurred in fulfilling the terms of engagement should be factored into the overall project charge or base rate. Using your own motor vehicle A percentage to cover running and maintenance expenses, comprehensive insurance and other costs involved in using your own motor vehicle should be factored into the rate charged. Travel time Normal travel time should be factored into your base rate. In projects which involve interstate, regional or rural travel, time lost to travel can be significant and shouldn't be overlooked at the quotation stage. Under normal circumstances, where travel is required, the hourly rates table above is a suitable benchmark for determining an appropriate charge. Again, you should nominate a figure for the number of trips in your contract terms and include a clause which states that additional trips will incur a claim for extra time and travel expenses.

3 Rates per business kilometre The ATO rates are a useful benchmark for motor vehicle costs. Table 1 - Latest motor vehicle allowances as set by the ATO Rates per business kilometre 1600cc (1.6 litre) or less Engine capacity Cents per kilometre Ordinary car Rotary engine car income year 1601cc cc (1.601 litre litre) 800cc (0.8 litre) or less 801cc cc (0.801 litre litre) 65 cents 76 cents 2601cc (2.601 litre) and over 1301cc (1.301 litre) and over 77 cents Source:

4 Accommodation and meals Where you are required to travel as part of the project on which you are engaged, it is appropriate that the cost of your accommodation, meal/s and incidentals should be factored into the total project cost or reimbursed as an expense. The standard of the accommodation should be made explicit in the terms of engagement (we suggest that it be at least the equivalent of 3 star accommodation). A percentage to cover the cost of insurance of your personal effects and baggage including any cost associated with excess baggage should also be factored in where the travel is necessary to fulfil the terms of the contract. The ATO s Reasonable Travel Allowances Taxation Determination is updated annually and, while intended for the use of salary earners, also provides a benchmark for calculating the appropriate charges for contractors domestic travel. The reasonable amounts for daily travel allowance expenses, according to salary levels and destinations, for the income year are shown in Tables 1 to 6 as follows: (Source: Taxation Determination TD 2014/19) Table 1: Employee's annual salary - 112,610 and below Place Accomm. Food and drink B'fast Lunch Dinner Incidentals Total Adelaide Brisbane Canberra Darwin Hobart Melbourne Perth Sydney High cost country Tier 2 country (see Table 5) Other country See Table Variable - see Table B'fast Lunch Dinner B'fast Lunch Dinner Table 2: Employee's annual salary - 112,611 to 200,290 Place Accomm. Food and drink B'fast Lunch Dinner Incidentals Total Adelaide Brisbane Canberra

5 Darwin Hobart Melbourne Perth Sydney High cost country Tier 2 country (see Table 5) Other country See Table Variable - see Table B'fast Lunch Dinner B'fast Lunch Dinner Table 3: Employee's annual salary - 200,291 and above Place Accomm. Food and drink B'fast Lunch Dinner Incidentals Total Adelaide Brisbane Canberra Darwin Hobart Melbourne Perth Sydney Country 190, or the relevant amount in Table 4 if higher Variable - see Table 4 if applicable Table 4: High cost country - accommodation expenses Albany (WA) 179 Jabiru (NT) 192 Alice Springs (NT) 150 Kalgoorlie (WA) 159 Bordertown (SA) 135 Karratha (WA) 347 Bourke (NSW) 165 Katherine (NT) 134 Bright (VIC) 152 Kingaroy (QLD) 134 Broome (WA) 233 Kununurra (WA) 202 Bunbury (WA) 155 Mackay (QLD) 161 Burnie (TAS) 149 Maitland (NSW) 152 Cairns (QLD) 140 Mount Isa (QLD) 160 Carnarvon (WA) 151 Mudgee (NSW) 135 Castlemaine (VIC) 133 Newcastle (NSW) 152 Chinchilla (QLD) 143 Newman (WA) 195

6 Christmas Island (WA) 150 Norfolk Island (NSW) 329 Cocos (Keeling) Islands (WA) 285 Northam (WA) 163 Colac (VIC) 138 Orange (NSW) 149 Dalby (QLD) 144 Port Hedland (WA) 295 Dampier (WA) 175 Port Pirie (SA) 140 Derby (WA) 190 Queanbeyan (NSW) 133 Devonport (TAS) 135 Roma (QLD) 139 Emerald (QLD) 156 Thursday Island (QLD) 200 Exmouth (WA) 255 Wagga Wagga (NSW) 141 Geraldton (WA) 175 Weipa (QLD) 138 Gladstone (QLD) 187 Whyalla (SA) 145 Gold Coast (QLD) 149 Wilpena Pound (SA) 167 Gosford (NSW) 140 Wollongong (NSW) 136 Halls Creek (WA) 199 Wonthaggi (VIC) 138 Hervey Bay (QLD) 157 Yulara (NT) 244 Horn Island (QLD) 180 Table 5: Tier 2 country Albury (NSW) Ararat (VIC) Armidale (NSW) Ayr (QLD) Bairnsdale (VIC) Ballarat (VIC) Bathurst (NSW) Benalla (VIC) Bendigo (VIC) Broken Hill (NSW) Bundaberg (QLD) Ceduna (SA) Country centre Charters Towers (QLD) Coffs Harbour (NSW) Cooma (NSW) Dubbo (NSW) Echuca (VIC) Esperance (WA) Geelong (VIC) Goulburn (NSW) Gunnedah (NSW) Hamilton (VIC) Horsham (VIC) Innisfail (QLD) Kadina (SA) Country centre Launceston (TAS) Mildura (VIC) Mount Gambier (SA) Muswellbrook (NSW) Naracoorte (SA) Nowra (NSW) Port Augusta (SA) Portland (VIC) Port Lincoln (SA) Port Macquarie (NSW) Queenstown (TAS) Renmark (SA) Rockhampton (QLD) Sale (VIC) Seymour (VIC) Shepparton (VIC) Swan Hill (VIC) Tamworth (NSW) Tennant Creek (NT) Toowoomba (QLD) Townsville (QLD) Tumut (NSW) Warrnambool (VIC)

7 Additional travel expenses The following items should also be considered when calculating a base rate or overall project cost where relevant: incentive required to leave familiar work and living conditions; cultural and/or environmental differences; unusual working conditions and hours of work; higher costs of living; costs of communicating with family interstate; site difficulties such as isolation; hardship due to lack of amenities; and time spent on booking and invoicing. This information current as at November 2014.

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