Per Diem For Company Drivers

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Davy A.'s Comment
member avatar

When I hired on with Knight, they do per diem as a default. I promptly said no. As mentioned above, the .2 cents is a rip off. Plus giving them capital to make money off of for a year is a big no.

In my case I qualified for exempt from witholding this year. If you anticipate a zero tax liability and or were entitled to a refund the previous year but didn't claim it you may file exempt. It's perfectly legal.

Now, if it turns out you do have a tax liability, you are of course responsible for it. But the thing is, when a person pays taxes, they don't make any money off the lost revenue. The concept that you getting a refund is somehow making money is insane. It means that you over paid, the government took your money, made money off it and then gave you back some of the money that was yours to begin with.

It's actually more of a financial gain to save aside enough money to cover your taxes, use that capital to make money while you have it set aside and then pay your taxes at years end. I'm not about to give the government and or a private company my hard earned money for them to profit off of.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

John S.'s Comment
member avatar

There is nothing misleading with Schneider's presentation. The only time you get more of a refund is if you have given uncle same an interest free loan by having too much withheld. In both examples, the same withholding level is used, the decrease in taxes is because of a decrease in taxable pay.

Even with Schneider charging 2 CPM , the net pay to the driver is 16% higher. I don't think it's right that they charge for this since they are also saving money on Social Security and Medicare taxes but this is disclosed in their example, so not misleading. My son Michael is not charged for the service at Marten as far as I can tell, he gets 17 CPM paid to him as per diem in addition to 47 CPM in taxable pay.

What I mean is, you can't take your standard meal deduction when it comes to doing your taxes if you take per diem pay. Schneider isn't accounting for that. It looks misleading to me still.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

John S.'s Comment
member avatar

Harvey,

Looking at it more closely, the person that made Schneider's presentation doesn't even understand how tax brackets work. You're not paying taxes at 22% with the numbers given. It's much closer to 12%.

G-Town's Comment
member avatar

Harvey you asked, I gave you my reason and then you attempt to debate with me. I don’t need or want to be schooled on my lack of control over my finances. Per diem doesn’t work for me, especially now. I’ll stick to my answer.

G-Town, Michael gets paid a total of 64 CPM (as long as he gets his loads delivered on time and paperwork scanned, which is the case 95% of the time), and 17 CPM of that is paid as per diem.

You don't have total control over your finances, the IRS and stage taxing authorities tax your taxable wages and there is nothing you can do about that other than reduce your taxable wages. Per diem pay for a W-2 employee is not taxable. Our CPA agreed that this was a valuable benefit. In the Schneider link I included in my original post, Schneider gives two examples of pay, one without per diem and one with per diem. The benefits are significant. Schneider also state that they bear the full risk of any audit expense.

Sid, I am well aware that the IRS rules changes, that is exactly why non-taxable per diem pay is a valuable benefit to employees. It is not a deduction as a 1099 driver takes, it is non taxable pay. Schenider is a big company, do you think they would be misleading drivers and opening themselves up to lawsuits from employees by mispresenting this in writing on their web site? They are audited by large accounting firms and this would be stopped if not legal.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Old School's Comment
member avatar
Even with Schneider charging 2 CPM , the net pay to the driver is 16% higher.

I don't know how you came up with that number. I'd be interested in understanding it though.

I have done this both ways. I have been on per diem and then decided to try going with out several years ago. In almost every industry I know of per diem is additional money given to you for your expenses on the road. In trucking it is money they subtract from your pay, put it into a different category and call it non taxable income. Which is crazy because if you look at your son's W-2 form, that money shows back up in another box that he pays tax on at the end of the year. At least that is how mine always worked out. It isn't even technically per diem. I consider it a gimmick.

This is why I asked in that other thread for drivers to please not comment on my remarks. This topic of per diem has been discussed on here many times. It is always lively and seldom do people agree on it. I suggest you take your tax advisors advice and do what they want you to do. I had to get right down in the trenches with my CPA and show him how mine was coming out. We both got a good laugh at the end and he told me, "I always enjoy it when you come by. I feel like I learn something from you each time."

Harvey, you seem to like researching things. Do a search on per diem using the search bar at the top of the page. See if you can find some of Rickipedia's comments on it. He did a great job of explaining it to people.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Steve L.'s Comment
member avatar

Harvey,

My opinion; 1. DO NOT use per diem to go, or not go, with a company. I.e. consider ALL factors.

2. Not worth arguing most of the time. The IRS rules are so screwed up even they get it wrong.

3. Urge your representatives to support the Fairtax and all this withholding stuff goes away.

Have a great day!

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Harvey C.'s Comment
member avatar

Harvey you asked, I gave you my reason and then you attempt to debate with me. I don’t need or want to be schooled on my lack of control over my finances. Per diem doesn’t work for me, especially now. I’ll stick to my answer.

double-quotes-start.png

G-Town, Michael gets paid a total of 64 CPM (as long as he gets his loads delivered on time and paperwork scanned, which is the case 95% of the time), and 17 CPM of that is paid as per diem.

You don't have total control over your finances, the IRS and stage taxing authorities tax your taxable wages and there is nothing you can do about that other than reduce your taxable wages. Per diem pay for a W-2 employee is not taxable. Our CPA agreed that this was a valuable benefit. In the Schneider link I included in my original post, Schneider gives two examples of pay, one without per diem and one with per diem. The benefits are significant. Schneider also state that they bear the full risk of any audit expense.

Sid, I am well aware that the IRS rules changes, that is exactly why non-taxable per diem pay is a valuable benefit to employees. It is not a deduction as a 1099 driver takes, it is non taxable pay. Schenider is a big company, do you think they would be misleading drivers and opening themselves up to lawsuits from employees by mispresenting this in writing on their web site? They are audited by large accounting firms and this would be stopped if not legal.

double-quotes-end.png

Why did you ask what Michael gets paid? Why did your tax preparer say it doesn't work for you?

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Harvey C.'s Comment
member avatar

double-quotes-start.png

There is nothing misleading with Schneider's presentation. The only time you get more of a refund is if you have given uncle same an interest free loan by having too much withheld. In both examples, the same withholding level is used, the decrease in taxes is because of a decrease in taxable pay.

Even with Schneider charging 2 CPM , the net pay to the driver is 16% higher. I don't think it's right that they charge for this since they are also saving money on Social Security and Medicare taxes but this is disclosed in their example, so not misleading. My son Michael is not charged for the service at Marten as far as I can tell, he gets 17 CPM paid to him as per diem in addition to 47 CPM in taxable pay.

double-quotes-end.png

What I mean is, you can't take your standard meal deduction when it comes to doing your taxes if you take per diem pay. Schneider isn't accounting for that. It looks misleading to me still.

After the 2018 tax law changes you are no longer allowed to take a standard meal deduction. Your standard deduction was increased but many expenses previously deducted are no longer allowed.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Harvey C.'s Comment
member avatar

double-quotes-start.png

Even with Schneider charging 2 CPM , the net pay to the driver is 16% higher.

double-quotes-end.png

I don't know how you came up with that number. I'd be interested in understanding it though.

I have done this both ways. I have been on per diem and then decided to try going with out several years ago. In almost every industry I know of per diem is additional money given to you for your expenses on the road. In trucking it is money they subtract from your pay, put it into a different category and call it non taxable income. Which is crazy because if you look at your son's W-2 form, that money shows back up in another box that he pays tax on at the end of the year. At least that is how mine always worked out. It isn't even technically per diem. I consider it a gimmick.

This is why I asked in that other thread for drivers to please not comment on my remarks. This topic of per diem has been discussed on here many times. It is always lively and seldom do people agree on it. I suggest you take your tax advisors advice and do what they want you to do. I had to get right down in the trenches with my CPA and show him how mine was coming out. We both got a good laugh at the end and he told me, "I always enjoy it when you come by. I feel like I learn something from you each time."

Harvey, you seem to like researching things. Do a search on per diem using the search bar at the top of the page. See if you can find some of Rickipedia's comments on it. He did a great job of explaining it to people.

There are several boxes on a W-2 but not all reported items are taxable. Michael's W-2 will arrive soon and I'll take a closer look then but it should not be a taxable item.

I research lots of things, I'm getting old by try to keep learning and also sharing with others what I have learned. I've searched previous per diem discussions and they were prior to the 2018 change in the tax code which eliminated the ability for truck drivers to deduct travel expenses.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

G-Town's Comment
member avatar

What’s the point Harvey? Yiu are way too smart for us...

You’re all about 1-upping anything we write. Read all of the replies. Find the piece Rickpedia wrote on per diem.

I am better off not taking the per diem rate. My take home was higher without it. End of our discussion Harvey.

It’s moot now, I’m in a day cab and get home every day.

double-quotes-start.png

Harvey you asked, I gave you my reason and then you attempt to debate with me. I don’t need or want to be schooled on my lack of control over my finances. Per diem doesn’t work for me, especially now. I’ll stick to my answer.

double-quotes-start.png

double-quotes-start.png

G-Town, Michael gets paid a total of 64 CPM (as long as he gets his loads delivered on time and paperwork scanned, which is the case 95% of the time), and 17 CPM of that is paid as per diem.

You don't have total control over your finances, the IRS and stage taxing authorities tax your taxable wages and there is nothing you can do about that other than reduce your taxable wages. Per diem pay for a W-2 employee is not taxable. Our CPA agreed that this was a valuable benefit. In the Schneider link I included in my original post, Schneider gives two examples of pay, one without per diem and one with per diem. The benefits are significant. Schneider also state that they bear the full risk of any audit expense.

Sid, I am well aware that the IRS rules changes, that is exactly why non-taxable per diem pay is a valuable benefit to employees. It is not a deduction as a 1099 driver takes, it is non taxable pay. Schenider is a big company, do you think they would be misleading drivers and opening themselves up to lawsuits from employees by mispresenting this in writing on their web site? They are audited by large accounting firms and this would be stopped if not legal.

double-quotes-end.png

double-quotes-end.png

double-quotes-end.png

Why did you ask what Michael gets paid? Why did your tax preparer say it doesn't work for you?

Day Cab:

A tractor which does not have a sleeper berth attached to it. Normally used for local routes where drivers go home every night.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

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