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Introduction to Per Diem Pay for Drivers

Introduction to Per Diem Pay for Drivers

Getting paid according to the per diem method means that your salary or compensation package is divided into two parts, the regular pay which is your basic taxable income and the per diem pay. The per diem pay is restricted for the transportation sector.

However, it is technically not a type of untaxed income. Rather, it is just a nontaxable reimbursement for meals and other emergency expenses and incidents. The distinction between taxable income and untaxed per diem income is very important. If a driver is paid according to the per diem method for income tax purposes, their gross salary will be decreased and they will owe less amount of money to the IRS.

On the other hand, the per diem income means that the transportation workers are getting paid with money that will not be included in their yearly income tax filings, as the “standard meal deduction” is not a uniform option. Moreover, most of the drivers’ take-home salary remains the same, regardless of the fact that of they are getting paid through the per diem method or not. However, it does have other advantages for the drivers.

Getting per diem pay means that the driver is immediately compensated for the expenses that they incurred during meal consumption. This inclusion in their paychecks means that the tax is not deducted over such charges and they are reimbursed by their employers. Per Diem is Latin for “per day” which means that the driver receives a daily allowance. According to the IRS Publication 463 – Travel, Entertainment, Gift, and Car Expenses, all personnel in the trucking industry are liable to receive per diem allowance for incidental and meal purchasing purposes.

The main objective of this initiative is to eliminate the need of the employees to itemize certain expenses, when they are filing their yearly taxes. If the driver doesn’t receive per diem income, when the time comes for filing taxes, they will either save the receipts for incidents and meals for evaluating the deductive calculations of 80% at tax time, or they can use the IRS “Standard Deduction”, which amounts to $59 for a day.

However, to find out legitimacy behind the claims made by the driver, the employer has a right to check the logbook of the truck to investigate if they are eligible for the per diem pay or not. This type of income is also dependent on the time that a particular driver spends on the road in a single year. Although a driver’s salary is divided into two parts, cents/mile earnings (taxed) and per diem reimbursements (untaxed), most of the companies decrease the cents/mile payment.

The per-mile rate is reduced because some of it will be included into the driver’s paycheck, untaxed. However, if a professional in the transportation is unaware about the rules and regulations regarding the per diem payment system, they should consult a professional accountant. It is also important to find out the policies of your employer or the fleet company that you work for, to investigate if you are eligible for the per diem payment system. – See more at:

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