Per Diem Pay For Truck Drivers

Yep the difference probably is peanuts. But not necessarily. I just used $1,500 as a random figure. That's why I say talk to a tax professional. And I agree that using the system as a savings account works for most people for exactly the reasons you said. But people should try to use a more efficient system, sadly though most people don't have the self control to not spend the money.

After doing some research I have some numbers to report. If you are a DOT regulated person as commercial drivers are the per Diem amount in the US is $59/day if you drive into Canada or Mexico it is $65/day. You would have to file an itemized return but, the days you are on the road times $59 times 80% is the deduction you can take on tax day. As a company driver you would have to keep track of your days away from home (logs). So lets say we drive away from home 5 days a week for 51 weeks. 5 days X 51 weeks X $59 = $15045 X .8 = $12036 deduction on your taxes. (The 80% is for DOT regulated persons only) 50% for all others. Not peanuts at all!!

Yep the difference probably is peanuts. But not necessarily. I just used $1,500 as a random figure. That's why I say talk to a tax professional. And I agree that using the system as a savings account works for most people for exactly the reasons you said. But people should try to use a more efficient system, sadly though most people don't have the self control to not spend the money.

OK, I'm "cornfused!" When I ran a maintenance company in the Bay Area (CA) we used to take large equipment (air movers used to dry vac all sorts of things) to a jobsite for (say) 14 days. I would give each man on the crew $75 per day (the actual meaning of per diem) as a living expense to offset the cost of the motel and food (14 X $75 = $1,051) and this was tax free, in that it was not reported on their W2 at the end of the year as income. Why is per diem paid by trucking companies (I thought you just got so much per mile) and what is this 80% figure and how is it reported at the end of the year??

Really curious because I haven't seen "per diem" discussed as an income feature here before.

Stephen E. Birch

The going rate for per diem is in 2013 and 2014 is $59.00 per day standard deduction, if you go out of the US into Canada and Mexico it is $65.00 per day and as a DOT regulated person, as driver are you can take 80% of the total as a tax deduction.

I know what Per Diem is. My question is:

Tons of companies offer it. But since newbies don't really know how it works, which is better.

Is it better to take per diem if your company offers it, or stay away from it?

I myself, like a big tax refund every year. But I read somewhere that almost always a driver makes out if the do take per diem.

Also. What is the going rate for per diem?

Keep it safe out there. Joe S

Just so you know, if you have to pay a fee for the per diem , they cannot force you to take it.

CRST tries to make it seem that you must have per diem but you do not because they make you pay a fee. My tax lady (who specializes in truckers taxes and is a saint to sort all that balogna out for me) said that if you live in a state where they take taxes out, then per diem from the company is favorable as long as they don't charge a lot. If you live in one of the states that doesn't have a state tax then the amount extra you would receive in minuscule. I receive a little notation at the bottom of my checks that tells me how much more I would have received if I had perdiem. The most I have ever seen that number reach is 2.30$. So in my case, it is not worth the loss of the fee.

Per diem as defined by the tax code is Per diem (Latin for "per day" or "for each day") is a daily allowance for expenses—a specific amount of money an organization gives an individual per day to cover living expenses when traveling for work.

The reason the above is important I will get to in a minute........

Here is the main point of my post....anyone EVER went and applied for a home loan or a car loan? Lending companies ONLY take in account your EARNED income and you can see for yourself by the definition above Per Deim is not in the category of earned income.

Now for an example.....Let's Say YOU Grossed $63,000 a year just to keep the numbers simple and this example in no way reflects the maximum allowed claim per diem.

OK now let's say $13,000 was per deim. It's not EARNED income so can not be taken into account on a loan application cause per deim can and will change every year so leading companies will only calculate the number they know will stay roughly the same which is your true earned income which in this example will be $50,000 instead of the $63,000 you were so proud of at the end of the year.

Now those on this site that are business minded or have a business background can see how collecting per deim throughout the year can be bad but for the rest.......

Per deim can stop you from getting a much needed load because you can only show true earned incoming so your actual salary is alot less on paper and that is what banks and leading institutions are going to look at when they decide to turn down your loan cause $50,000 is not enough.

While per deim is definitely not a bad thing cause it does fill a purpose and in my opinion is better to take at the end of the year that way it's not show on your w2 form there by keeping an inflated number separate from your actual pay. May not seem like a big deal but if it's on paper it will be judged.

Well I tried to make what I was saying clear and hope it came across. Maybe someone can add to this and maybe make it simpler to understand.

Well, my question is still the same : why do trucking companies PAY per diem in the first place? Is it a regular thing or a rare, special circumstance thing? Again, I was under the impression that they simply paid a "per mile" fee. Does a significant portion (as in $13,000 out of a total of $63,000) come from per diem?? Thanks,

Stephen E. Birch

Well, my question is still the same : why do trucking companies PAY per diem in the first place? Is it a regular thing or a rare, special circumstance thing? Again, I was under the impression that they simply paid a "per mile" fee. Does a significant portion (as in $13,000 out of a total of $63,000) come from per diem?? Thanks,

Stephen E. Birch

In short it's about the amount of taxes or less taxes a company has to pay the government for employment tax per employee. You get per deim any way you can get it the difference is how you claim it on your taxes. If a company pays you part of your pay with per deim that part is not taxed therefore lowering the companies tax liability cause they are not paying you a taxable income. And at the end of the year you can only claim what per deim that you did not get from the company. The company pays you less of a taxable wage. Yes it's perfectly legal. Nothing says a company can not include per deim as a way to off set living expenses while on the roa as a part of your pay as long as you are receiving your full pay for the work you are doing. Basically per deim is free money and as long as 6 ou get it from somewhere it does not matter how you get it. Weather as a tax break at the end of the year or to off set living expenses during the year. As long as its claimed correctly on your tax form then it's all good.

It can benefit the driver also. Less taxable wage the less taxes you pay as a driver and now the vicious cycle starts. Less table wage less taxes you pay the less taxes you pay on income the less you can claim as earned income and the less you have to show a leading company means a lower loan.

why do trucking companies PAY per diem in the first place? Is it a regular thing or a rare, special circumstance thing?

Since truckers get a lot of tax write-offs each year they give you a choice. You can either:

1) Get some of your income tax-free each week (getting per diem). This way you'll take home more money in each paycheck but you'll get a smaller tax return at the end of the year.

2) Get none of your income tax free each week. This way you'll take home less in each paycheck but get a huge tax return at the end of the year.

In the end it makes no difference really. You make the same amount of money. The only difference is in how they distribute it to you. They either take out the full amount of taxes and you'll get a huge tax return or they take out fewer taxes and you get a smaller tax return.

The company benefits by not having their matching portion of the taxes as high as if there were no per diem. The tax code allows a standard deduction of $59/day for those of us that are away from home for periods of time. The standard can be used or the exact amount can be used if you keep good records to back it up. The major difference between normal persons away from home and DOT regulated persons is that the DOT persons can take 80% of the amount as a deduction and the normal person can take only 50%. As a driver I would suggest all to take a look at the option if you have that choice and do your do diligence and of course the math. If you explore Trucking Truth's training companies there is one that offers per diem and you can see the differences in pay and benefits on their web site. On the surface there seems to be a substantial difference, however, when you figure the whole picture, there will be a surprise.

why do trucking companies PAY per diem in the first place? Is it a regular thing or a rare, special circumstance thing?

Since truckers get a lot of tax write-offs each year they give you a choice. You can either:

1) Get some of your income tax-free each week (getting per diem). This way you'll take home more money in each paycheck but you'll get a smaller tax return at the end of the year.

2) Get none of your income tax free each week. This way you'll take home less in each paycheck but get a huge tax return at the end of the year.

In the end it makes no difference really. You make the same amount of money. The only difference is in how they distribute it to you. They either take out the full amount of taxes and you'll get a huge tax return or they take out fewer taxes and you get a smaller tax return.