Per Diem Pay

I know what per diem means and the company I drive for said they would pay me $55.00 per diem. Cool. Then when they do my paycheck they remove the per diem so as not to tax it, Cool too. Now, they don't put that per diem back onto my paycheck!? They say it comes out of my check 'cos its up to me to pay it???? I don't agree. Either they are paying my per diem or they are simply loaning me the per diem. In the end my check is over $900.00 short. I don't even use that much per diem so.....? I am confused and they just make me more confused when I talk to them about it. Can you help me understand? And is this right? I don't think it sounds legal. Thanks Chris.

Taking per diem just changes your taxable income. If (for example) your CPM is 40, the company could designate 10 as your per diem. This would lower the amount of taxes taken out per paycheck. So if you drove 1000 miles at 40 a mile, your total would be $400. Your federal income would be $300 and your per diem would be $100. So you'd only be taxed on the $300 amount. In your pocket, then, you should see $100 for per diem (since it is not taxed) and then whatever is left of the $300 after taxes and deductions (health ins, 401, etc).

(However, as some have pointed out, some companies also charge you a .2 fee to do this for you so that would lower your pay. In this example you'd get 28 CPM, 10 per diem, and 2 for the fee).

Another thing to consider is that unless you are an O/O, you cannot deduct this from your schedule C. As an company driver, you would have to deduct your per diem and other allowable expenses on your Schedule A Itemized Deductions. The warning here is that you would have to know that your total per diem and other expenses for the year would exceed your standard deduction. If it will not, then it seems that it would be best to have the company pay you per diem and then just take your standard deduction.

As least that's how I am understanding it...

I know what per diem means and the company I drive for said they would pay me $55.00 per diem. Cool. Then when they do my paycheck they remove the per diem so as not to tax it, Cool too. Now, they don't put that per diem back onto my paycheck!? They say it comes out of my check 'cos its up to me to pay it???? I don't agree. Either they are paying my per diem or they are simply loaning me the per diem. In the end my check is over $900.00 short. I don't even use that much per diem so.....? I am confused and they just make me more confused when I talk to them about it. Can you help me understand? And is this right? I don't think it sounds legal. Thanks Chris.

How are you receiving the per diem money? On a Comdata card or other cash card?

I don't recieve any money. They don't send me the $55.00 at anytime by any means. But there it is on my paystub as $935.00 for per diem for this pay period. Is it just me or are they robbing me?

I don't recieve any money. They don't send me the $55.00 at anytime by any means. But there it is on my paystub as $935.00 for per diem for this pay period. Is it just me or are they robbing me?

That $935.00 is deducted from my gross pay. They say to save me in taxes! Then it should be added back??? I don't get it.

I don't recieve any money. They don't send me the $55.00 at anytime by any means. But there it is on my paystub as $935.00 for per diem for this pay period. Is it just me or are they robbing me?

That $935.00 is deducted from my gross pay. They say to save me in taxes! Then it should be added back??? I don't get it.

Ask to opt. out then.

I did that today. But I never opted for it. And I'm still out $935.00! I just have to learn the language of this side of the industry I guess. But this just doesn't sound right in so many ways.

Wow Christopher you're from the city I was born in hahaha never been there since, it's on the bucket list...........Anyways sounds fishy to me like they skimming off and pocketing it.... I'm no accountant, but smart enough to know they don't have to remove it from your check.......Why can't they tax what is supposed to be, and leave the other as it is, Per diem , and not tax that portion?

No company will rip off employees a grand from their paycheck. (That's called jail time for somebody.)

Did you check the deductions column where the tax, medical, etc. adjustments are?

I don't know the particulars, but they deduct the big amount (so you don't have to pay tax on that amount) then pay you back the lesser Per Diem amount that you don't pay tax on. And you need to itemize that on your income tax forms.

Taking per diem just changes your taxable income. If (for example) your CPM is 40, the company could designate 10 as your per diem. This would lower the amount of taxes taken out per paycheck. So if you drove 1000 miles at 40 a mile, your total would be $400. Your federal income would be $300 and your per diem would be $100. So you'd only be taxed on the $300 amount. In your pocket, then, you should see $100 for per diem (since it is not taxed) and then whatever is left of the $300 after taxes and deductions (health ins, 401, etc).

(However, as some have pointed out, some companies also charge you a .2 fee to do this for you so that would lower your pay. In this example you'd get 28 CPM, 10 per diem, and 2 for the fee).

Another thing to consider is that unless you are an O/O, you cannot deduct this from your schedule C. As an company driver, you would have to deduct your per diem and other allowable expenses on your Schedule A Itemized Deductions. The warning here is that you would have to know that your total per diem and other expenses for the year would exceed your standard deduction. If it will not, then it seems that it would be best to have the company pay you per diem and then just take your standard deduction.

As least that's how I am understanding it...

Thanks for all the info. I understand it better now. However, there is still this money missing so.....maybe time to look for another company to drive for. Thanks again, this info has been an education in itself.