If I can’t pay for expenses, how do I pay for their travel?
Although you cannot pay for travel expenses, you can cover the anticipated cost of travel by building the amount into the fee for services. For example, let’s say you are paying a $500 speaker fee and want to cover air, two night’s hotel and some meal expenses. You estimate that air will be around $480, hotel will be $135/night and you think $60/day is a fair daily rate. This puts the estimated travel cost at $870. You would then write the fee on the contract for $1,370. We recommend rounding up to cover any incidental expenses or changes in travel costs. In this example, you might want to offer $1400. Regardless, always round up to the nearest whole dollar. If travel is estimated at $866.58, use $870.
What if I’m not paying them, I just want to cover their travel costs?
If you are ONLY paying travel costs then the individual is not considered to be an Independent Contractor and University Travel Policy 6180 applies. You can pay for air or hotel either by P-Card or by reimbursement. Any reimbursement should follow the guidelines for How to Reimburse Non-Employees, Option Two.
What if I want to cover travel costs prior to the completion of service?
Your agreement should include payment dates. In this case, you would write something like, “Compensation to be $1,370 with $870 payable within two weeks of signature and $500 payable within two weeks of service.”
If a speaker is coming to class, how is that different than me teaching class (ie. Core Business)?
This is an excellent, and common, question. The differential here is that the speaker is not teaching your class, they are performing a service that will enhance your class. It is also presumed that they are an expert in their field with some knowledge or experience that goes above and beyond what you have to offer.
What if I pay my supplier less than $599?
This does not change the process for classifying or paying your supplier. Nor does it impact their responsibility to report income to the IRS. However, it does mark a cutoff point at which Boise State will issue a 1099. All suppliers who are paid $600 or more in a calendar year will be issued a 1099.
What if I’m bringing someone in for an interview?
A person coming for an interview is a job candidate and is not subject to IRS Classification. These individuals should not be performing services as part of their interview process.
I hired someone to create balloons at an event and had to pay them as an Independent Contractor but my friend in another department was able to pay them with an Invoice Payment. Why did I have to do more work?
It is possible that the same supplier could be paid in two different ways – it all depends on what they are providing. A balloon supplier making balloon animals or providing balloons to participants at an event is providing a service and needs to be treated as an IC; however, that same supplier may deliver a bunch of balloons for an event and would be treated as someone providing goods.