Could someone explain how this works, is it good or bad, do most companys give you like spending money is this normal, I dont really understand why wouldn't You just spend Your own money on the road instead of borrowing from the company, at least thats how I am perciving it, or am I wrong and this is totally wrong.. When hired I was planning to just have my wife wire money to me when I need it, I think most stops have western union or at least some type of service.. Oh yeah and like the header says what is perdiem and how does it work???? Thanks Guys,
SAFETY FIRST!!!!

First, understand the IRS will allow an OTR trucker, or any other business traveler, to use as a business expense close to $50 per day, without receipts, for meals and incidental expenses. In some areas of the country, with higher cost of living, the amount may be a bit higher. In some areas, it might be a bit less.

A company can pay a qualified employee this expense in the form of a per diem payment. They can deduct it from their company taxes, without receipts as well.

After that bit of basic information, the subject gets a little murky.

No two companies have the same policies regarding per diem payments. Few will pay the full amount allowed by the IRS. Most cap out at $20-25 per day, leaving you the opportunity (or task) to deduct the balance on your own tax returns.

Some companies pay an additional couple of cents per mile and call it per diem. Whether it's considered income and taxes deducted will be important to know.

Don't confuse a "Cash Advance" with per diem. An advance is just what it sounds like, an advance on your pay settlement.

To add to the confusion, a company with whom I was recently employed, paid per diem, but, they did it in the form of cash advances on the Comdata card.

Now I work with an outfit that pays expenses, but, only if the actual receipts are submitted after each trip.

This is an area where a thorough understanding of the companies' policies will be extremely important. Don't assume anything.

Ok thanks 2by, Yeah I will get the low down on it when i have my face2face interview, and thanks for the tax info that is good to know, my wife will be thrilled to find that one out she is a tax freak, I figured on spending about 40 to 50 a day on expenses and I guess I was in the ballpark, when I am working for the comapny I am sparing for here, just local stuff, but usually a 12 to 14 hr day, I leave the house with 40 dollars, if I eat a big meal in that time I usually will return home with 10 dollars, the rest spent on butts and misc drinks and candy, so 50 a day for being otr should be good,

First you must be aware of a few things. Truckers are permitted to deduct daily meal expenses provided they DO NOT RETURN HOME AT DAYS END. The amount is currently $42.00 per day for each day you can prove you were "away" from your home. The catch to this is you may only deduct 75% of that amount on your taxes. In the event you return home daily you will be ineligible for this tax deduction. Should you return home partway through the day you may deduct that day on a prorated basis (dividing the day into quarters). The key to this deduction is you must be "duplicating your expenses." This means you have already bought groceries for your "tax home" but cannot utilize them due to your job forcing you to be away.
Now for the more complicated aspect of a company offering "per diem pay." This is a gimmick designed to put more take home pay in YOUR pocket while the company takes the tax deduction (which means you cannot when you file your taxes). The reason a company will "offer" this is very simple. THEY DO NOT PAY TAXES ON THIS MONEY. That means no social security tax is calculated for this. If they offered all the pay as "straight pay" they would be obligated to pay the social security, medicare, federal, state, and local tax for that money. Lets assume they offer an .08 cpm (cent per mile) per diem. On a 3000 mile payweek this will equate to $240.00 "untaxed" going into your pocket. Now here is where this gets really "interesting." Should your company "overpay" the perdiem amount to you then you must declare this additional "untaxed money" as earnings when you file your taxes and pay the taxes due at that time. This is why some carriers will offer a lower "perdiem rate" so the drivers dont get bit in the butt by the tax man. The good thing is for the next tax year the deductible amount goes up to 80% of whatever the US GSA (General Services Administration) sets as the new fiscal year daily per diem rate.
Given the potential pitfalls of this pay scheme I recommend NOT accepting it. Take the deduction for yourself when you file your taxes. Your daily logbook showing your time away from home will be proof enough to qualify for this deduction.

Search the forum for the Per Diem threads. There are many that have a lot of detail, and other information on the pros and cons of Per Diem.

I'm home every week. I use the company cash advance for my on the road expenses. Since I am limited to how much ($100) I can get per week, I don't worry about a negative paycheck. We can get more, but we must contact payroll for additional amounts, a pain in the butt sometimes.

I usually cover scale tickets, tolls, and a few meals out of this advance. If I get into a high toll area, I will use my ATM card for additional cash.

NEVER use Western Union, the tax write off isn't worth the added expense. Save your money, take the advance for FREE when you fuel. Just be wise with your money handling.

Cash advances/loans from the company are directly tied to your "current" pay with 90% of the companies. IE miles you have already run, but have not been paid for yet. It's your money, they're just earning interest on it for the next couple of weeks.

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As I understand it, your per diem is $52 a day before the 75% reduction.
This comes out to $39 a day that you actually get to write off.
This amount will change over the next few years as the goobermint will be allowing you to deduct 80% next year (I think) & more in coming yrs.
I believe that unlike traditional per diem rates, one for a truckdriver does not change by location as do others.
The IRS has a publication to tell about per diem for truckdrivers.

As mentioned earlier, per diem can be a double edged sword.
It can leave you with more untaxable money in your pocket at week's end.
However, that extra cash is costing you more than you realize.

Per diem is subtracted from your gross pay as a non taxable amount.
That lowers your employer's required contribution to your social security payments.
He gets out of paying his 7.5% on whatever the per diem amount is.
You get out of paying your share of income tax & so on based on the per diem amount.

Aside from getting burned out of part of your rightful SS contribution, per diem also costs you in several other ways.

Your W2 will only show the non per diem amount you made for the year.
Your gross will be a lot lower.
A bank or lender is not going to see or want to hear about your per diem amount.
He's interested in the gross.
You just got burned at the bank.

When it comes to Workman's Comp you get burned.
Your WC benefits are based on your gross as well.
Low gross=lower benefit check per week. (if you're lucky enough to get one)

Unemployment is another place you take a hit.
Low gross=lower weekly benefit checks.

The only time a per diem arrangement will work in your favor is if you have a need to show a lower gross per year.

People who end up paying child support get out a little cheaper.
If you have some kind of other wage garnishment going on, it can help.

The only way you can make out with per diem is if you can keep from spending the whole amount & investing the remainder in an interest bearing mechanism.

Of course, you'll probably have to pay taxes on whatever interest is acrued on that amount.

Lastly, the per diem is your daily meal alottment.
It's not meant to cover your living expenses or supplies on the road.
You need to keep the receipts for everything other than your meals & declare them on your returns.

You may have noticed that I have a problem with per diem.

It seems to me that as an employee, regularly away from home overnight, the company should be paying your road expenses.
They're not. They're making you pay your own way.
In many cases, they make you pay for their road expenses in the form of tolls & scale tickets etc.

Watch out if you pay for any of their stuff with your credit cards.

You get burned for the interest & service charges if they don't reimburse you quick enough to pay your credit card bill off before the CC people stick you with those charges.

Also as far as credit goes, your FICO score drops as you run your card up towards the limit.
It's not entirely based on what the upper limit is, but how close you are to the limit regularly.

HOLY F!!!! I am glad I ran across this thread! Thanks for the info BC!

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A bit off topic but important none the less.

Here's another nifty little contrivance that works against you.

Don't pay for anything that the company says they will reimburse you for in your next check unless you make sure it's not going to look like you grossed more at years end.

When my company trucks would break down, I was told to use my EFS checks to pay for it.

That EFS check is assigned to you, it goes against your pay just like any advance would.
In fact, it is technically your money they just used to pay the bill.

When the company gets around to it, they pay the bill to the mechanic & supposedly reimburse your account for the same amount.

If the company does the paper work wrong, that bill amount shows up on your wages as a higher gross.

You broke even on the repair bill because they reimbursed you but...you just became liable for the income tax on that bill amount because it now reads like added income.

If you use those types of checks on the company's behalf regularly, your taxable amount can increase quickly even though you didn't make more money.

can you help

BobC is correct. The daily per diem amount for the contiguous US is in fact 52.00. (My post listed it at 42.00 which was a typo I missed).

Thankyou for the corrected info BobC.

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