Getting a headache

I don't understand what it is either other than it has to do with tax's which I know nothing about and don't care to know about. I just want tax's taken out before I get my check so I don't have to screw with it and I'm happy.

 

Per Diem is money paid to you to pay for daily expenses. In the trucking industry, that would translate to food or showers mostly. Its tax free. However, if you're not using all of the per diem, you may have to pay taxes at the end of the year.

It works like this:

Say you're making 33 cents per mile (CPM)
If you're in a per diem program, then you will be paid, lets say for example, 21 cpm. You will then be paid, for example, 10 cpm per diem, and the company will charge you 2 cpm for being in the per diem program.

CRST for one has a mandatory per diem program. As it was explained to me, after 30 days, a computer will calculate average earnings to determine which will put more money in your "pocket". If the per diem pay is more than regular pay, then thats how you're paid. If the regular pay is more than the per diem pay, then you're paid straight up mileage pay. Thats how it was explained to me.

 

I have never in 30 yrs of truck driving heard of anyone being charged for being paid per diem!!!! If you are being paid .36 per mi and you are getting .06 per diem,you are getting taxed on the .30 per mi. at the end of the year if you haven't used your entire federal allowence,you can claim the difference on your taxes.

 

No that's correct some companies are charging 2 cpm to join their per diem plans. Marten started one earlier this year and is charging drivers 2 cpm to turn 11 cpm of their gross into per diem pay. They made it optional to join, thankfully. It didn't look like a good deal to me because I can do that same deduction at tax time using the standard meal deduction. If I accept Marten's per diem plan, my standard meal deduction goes poof.

Something about companies charging their drivers to join these per diem plans doesn't smell right. Marten's info sheets on the subject look very suspicious to me. Could it be that companies unable to pass on rapidly rising fuel costs to their customers, have resorted to scamming on their drivers with smoke and mirrors?

I'm currently reading all the posts in this forum that contain the word "diem" to try and find out better exactly what's going on.

 

carpe diem


(Sorry... I had to... it was just sittin there, calling me... really... )

 

lol

My first thought was Deimos and Phobos.

Yea, spelled differently, but I think appropriate.

Phobos: Fear
Deimos: Hate
Per Diem: both

 

I can tell you, if you elect to receive per diem from the company on your weekly paychecks, your taxable income is reduced. If you were to apply for a loan, credit card, etc, which required proof of taxable income before extending you a line of credit, you would show that you made less than you actually did.

Social security and all that other jazz is based on taxable income. If you make less (accepting per diem) you contribute less, which could decrease your benefits later in life.

If you elect NOT to receive per diem via your company, you will pay taxes on your wages at the end of the year.(but we pay them weekly on our checks, right? ) Example you make 40k gross. You will pay a % of 40K in taxes. HOWEVER- you can deduct 52$ a day for every day you are away from your tax home which requires you to take a dot mandated break. This decreases your tax liablity at the end of the year. You also claim things like showers, tools, hotels, rental cars, etc.

Simply put, take your money home NOW weekly, or get SOME of your overpayment in taxes at the end of the year. 7.5% of what you overpay in taxes is given to social security. Social security does not issue refunds. You lose 7.5% of your money.

None of that may have made any sense.. but do pay attention to the lasts paragraph.

I personally do not accept company paid per diem.