Is Per Diem Good Or Bad?

I'm not familiar with Per Diem and I have mixed feelings because I hear people say that its good and I hear people say that its bad. Id like to hear from others who have gone before what they feel about Per Diem so I can make a decision whether or not its for me. So if anyone can help me understand whats best , Per Diem or NON- Per Diem , that would be awesome! I greatly appreciate anyone's feedback! Thanks in advanced!!! :)

Hey Denise. We have a ton of information on per diem pay for truck drivers.

Honestly it isn't worth worrying too much one way or the other. In the end it's going to basically work out the same. You either pay more in taxes each week and get a big tax return at the end of the year (non per diem) or you get some of your reimbursement each week in your paycheck and get a smaller return at the end of the year (per diem pay).

In the end it works out close to the same. So don't sweat it. Saving money on the road by stocking up on store bought foods instead of eating in restaurants is going to make a much bigger difference in the end than whether or not you take per diem.

Also, keeping receipts and itemizing expenses isn't really worth doing because you can take the standard deduction (whatever percentage of $59 per day they allow) instead. I can't imagine a person eating close to $59 per day in food so the standard deduction will work out better than itemizing would, which is exactly the reason the Government gives the option of standard deductions - to prevent millions of people itemizing their expenses and sending in boxes of receipts every year.

Also, averaging a few more miles each week is going to get you further than trying to save money on taxes. So focus on efficiency also. Make sure your husband is getting great miles, healthy food, and has a good relationship with dispatch. You can spend a year trying to figure out tax strategies and lose everything you've gained by missing one or two good loads in a year.

So you can take per diem or not, doesn't matter much. There are a lot of ways to make or saving money that will have a much bigger impact on your end results.

But check out the link I gave you above. We just put that information together recently. It's a pretty complex subject but we tried to explain it the best we could.

Its kind of personal choice really. Basically if you take per diem then your weekly check is higher. If you don't take it then you can claim it as a deduction on your taxes at the end of the year.

That's the simplest way I've heard it explained but I do not take per diem but I also haven't filed taxes as a driver yet. I'm sure there's guys on here that have done it both ways and can explain it from each side.

Isnt per diem a separate check from your regular check? I wouldn't do per diem in my opinion.

Hi guys, I ran across this driver from Millis and he talks about per diem. I found it informative. He has lots of volgs. Might want to check it out.

https://www.youtube.com/watch?v=Y1ER9fMszmY&list=UUxUXJB3AGUH_h5Y9RmBbglQ

Isnt per diem a separate check from your regular check? I wouldn't do per diem in my opinion.

No, it comes on the same check. It will be listed on your pay settlement as per diem under the pay breakdown for each individual load, and then again in the summary at the bottom, either as per diem or non-taxable income.

Per Diem is not included on your W-2 as taxable income. It reduces your gross income by the amount of Per Diem pay received. This is a good thing if you do not have enough deductions to benefit from itemizing your deductions on your tax return. If you do itemize, it might be beneficial to not take Per Diem and rather take the deduction allowed by law on your return.

Each driver has to consider their own situation and act accordingly (if your company offers you the choice). In my case, excluding Per Diem from my taxable income is preferable, but that's just me. Another consideration, however, is that by lowering your gross taxable income, it also decreases the amount paid on your behalf into social security which will eventually result in a lower social security payout to you upon retirement. That's one of the main reasons why companies like to offer the Per Diem arrangement; it lowers the amount of payroll taxes they must pay for drivers.

My situation in life is such that I welcome all of the tax-free income that can be had. These thoughts are my amateur opinions. It is always wise to seek the advice of a professional who is competent to give advice specific to your own situation.

It's actually pretty simple and it makes very little or no difference in the end. Truckers get a lot of tax writeoffs. So if your company takes the standard amount of taxes out of each paycheck you're going to have a huge tax return at the end of the year. As an alternative you can receive some of your pay tax free each week which will give you a larger paycheck but will reduce the amount of your tax return at the end of the year. This alternative is per diem pay.

So it really just comes down to your preference. Would you like to have smaller checks each week but a huge tax return (standard pay) or would you like larger paychecks but a smaller tax return (per diem pay)? In the end your net income (income after taxes) will be pretty much the same. There may be small fees associated with taking per diem but they won't amount to a hill of beans in the end.

Hey guys! I know this is an old topic on here, but this per diem thing is bugging me. I'm new to trucking industry (just married into it in 2014), so I am trying to 'understand' the game (since I'm the one doing the taxes for us).

Coming from a 'non-trucking' industry where we pay our guys 'per diem' above (or separate) from their pay. Say for example our guys would be paid $18/hr ($720 for a 40 hr work week). They receive a separate per diem check of $50/day each Monday ($250) when they are working on the road. We do not deduct the per diem from their $720. It is above and beyond. So this industry's way of reducing your 'pay' by the per diem is a joke to me and deceiving. On paper a company says 'we pay .xx/per mile and $50 per diem per day' is not true and misleading. Now that this new company hubby is at using the 'per diem' system, I will not be able to take the $59/per day he is on the road in deductions on our taxes. That deduction is beneficial (at least to us) because we are able to itemize.

So now here is my question (after my long winded bantering lol): since the 'allowable' IRS is $59/per day and we are getting "$50 per diem/per day", would we still be able to claim the $59 but show the company reimbursed us for the $50? At least we would be getting a very small itemized deductible. Does that make sense at all?

I really suggest that you find a tax company that is familiar with the trucking industry before you try to tackle it on your own. At least for the first year, since the trucking industry is one of the most tax intensive industries in business, there are so many deductions and loop holes you can miss and not realize costing you $$$$.

Also tax law in the industry is ever changing and needs to be continually monitored. I understand wanting to be able to do them yourself but realize getting some professional help the first year will give you a platform to understanding the do's and don'ts of the industry.

I really suggest that you find a tax company that is familiar with the trucking industry before you try to tackle it on your own. At least for the first year, since the trucking industry is one of the most tax intensive industries in business, there are so many deductions and loop holes you can miss and not realize costing you $$$$.

Also tax law in the industry is ever changing and needs to be continually monitored. I understand wanting to be able to do them yourself but realize getting some professional help the first year will give you a platform to understanding the do's and don'ts of the industry.

Thanks Brian M. The first year was a easy (after studying the laws carefully) since he did not have per diem. this year, will be my challenge.