Per Diem Pay For Truck Drivers

Topic 7308 | Page 1

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Russell S.'s Comment
member avatar

could someone explain what per diem is and how it works in a simple way

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

Rick S.'s Comment
member avatar
Best Answer!

Woody's reply is the best on that older thread.

Keep in mind - the TRUCKING COMPANY'S like per diem , because they are not responsible for "matching tax payments" for SSI/FICA. So it costs them less "out of pocket" to give you a portion of your pay this way.

But it is NOT TAX FREE MONEY (like you thought ANY MONEY was going to be TAX FREE nowadays).

It is UNTAXED INCOME (not UN-TAXABLE INCOME) - meaning the WITHHOLDING TAXES were not deducted from those amounts. For people that don't claim a lot of exemptions - this means less $$ coming back on your tax return (because you paid in less). For those with a lot of exemptions

They will STILL SHOW UP on a W-2 - as "wages and salary". Basically - the per diem you get paid (and not had taxes withheld on) "should be" offset by your deduction (and they zero out - tax-liability-wise at least).

Where you "get it back" - is either by deducting expenses or taking the "standard daily rate deduction" - which is currently $53 per day - for every day you are ON THE ROAD. http://www.irs.gov/Businesses/Trucking-Industry-Overview---Significant-Law-and-Important-Issues

Basically - the per diem you get paid (and not had taxes withheld on) "should be" offset by your deduction (and they zero out - tax-liability-wise at least).

For those of us that DO NOT MAINTAIN A HOMESTEAD - you (legally) cannot take the "per diem" or "road expenses" deductions - because they are only allowable for "away from home" days. Kinda hard to be "away from home" - if you DO NOT HAVE ONE.

Most people will never get caught by the IRS (not maintaining a homestead, but taking the deduction) - but if you get AUDITED - you will have to PROVE that you maintain one somewhere.

Taking the "standard daily deduction" is usually easier than keeping receipts for every meal and expense. But you will also have to PROVE (if audited) every day you weren't home, got paid per diem and claimed the deduction. This can likely be done with PAY STUBS - since the rucking company will match "days out" with "days paid per diem".

It's not all that complicated - but to reiterate - it's not FREE MONEY. It's $$ the company doesn't have to pay taxes on. Does it help with expenses - since it comes as an "advance" (in most cases), rather than on your weekly/bi-weekly/whatever paycheck. You are still getting the SAME PAY.

Rick

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

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Indy's Comment
member avatar

I've seen it explained before, but never in a simple way that I could understand... here's hoping TT will come thru again...

David's Comment
member avatar

could someone explain what per diem is and how it works in a simple way

Truckers Per diem is Per Day pay.

What Is The Difference in Per Diem vs Straight pay this link is on our forums.

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

Indy's Comment
member avatar

"Thinks too much" explained it nicely there, I think.

Rick S.'s Comment
member avatar
Best Answer!

Woody's reply is the best on that older thread.

Keep in mind - the TRUCKING COMPANY'S like per diem , because they are not responsible for "matching tax payments" for SSI/FICA. So it costs them less "out of pocket" to give you a portion of your pay this way.

But it is NOT TAX FREE MONEY (like you thought ANY MONEY was going to be TAX FREE nowadays).

It is UNTAXED INCOME (not UN-TAXABLE INCOME) - meaning the WITHHOLDING TAXES were not deducted from those amounts. For people that don't claim a lot of exemptions - this means less $$ coming back on your tax return (because you paid in less). For those with a lot of exemptions

They will STILL SHOW UP on a W-2 - as "wages and salary". Basically - the per diem you get paid (and not had taxes withheld on) "should be" offset by your deduction (and they zero out - tax-liability-wise at least).

Where you "get it back" - is either by deducting expenses or taking the "standard daily rate deduction" - which is currently $53 per day - for every day you are ON THE ROAD. http://www.irs.gov/Businesses/Trucking-Industry-Overview---Significant-Law-and-Important-Issues

Basically - the per diem you get paid (and not had taxes withheld on) "should be" offset by your deduction (and they zero out - tax-liability-wise at least).

For those of us that DO NOT MAINTAIN A HOMESTEAD - you (legally) cannot take the "per diem" or "road expenses" deductions - because they are only allowable for "away from home" days. Kinda hard to be "away from home" - if you DO NOT HAVE ONE.

Most people will never get caught by the IRS (not maintaining a homestead, but taking the deduction) - but if you get AUDITED - you will have to PROVE that you maintain one somewhere.

Taking the "standard daily deduction" is usually easier than keeping receipts for every meal and expense. But you will also have to PROVE (if audited) every day you weren't home, got paid per diem and claimed the deduction. This can likely be done with PAY STUBS - since the rucking company will match "days out" with "days paid per diem".

It's not all that complicated - but to reiterate - it's not FREE MONEY. It's $$ the company doesn't have to pay taxes on. Does it help with expenses - since it comes as an "advance" (in most cases), rather than on your weekly/bi-weekly/whatever paycheck. You are still getting the SAME PAY.

Rick

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

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
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