Werner Per Diem fraud

Let me get this straight.

They are already sticking it to you by paying perdium so your taxable income is less.

Now they are going to charge you for it?



If I was to apply there and don't opt for the perdium I could lose my job?

You know I would be too expensive of an employee to have around!!

The spendy new president is going to want the money and this perdium #### is robbing them out of a lot of money!

 

Not necessarily... you're getting something like 25% of your income free of any tax.

Schlock companies charge you something to make up for the tax advantage they loose by providing you with some non-taxable income. The way the IRS looks at it is that all money gets taxed... just depends on where it happens at. Since per diem flows through the system without any tax at the end of the line, the company looses out by not being able to decrease their corporate taxes by what they pay you in per diem.

Looking at it the opposite way, since YOU get taxed on your normal income, the company gets to claim it as a deduction on theirs!

This is seriously twisted ####e!

Probably not, but some companies require that you sign up for per diem for a specified period.

Actually, your ahead of the game as long as they aren't charging you that penny-or-two per-mile.

Not really... its one of those things that's been in the tax code forever. Its one of the few smart tax laws in existence. The IRS really doesn't want to mess around with a large box of meal receipts... so they just assume you bought $59 worth of food today.

 

No
If they "give" you a per diem of $X (using $X only as an example), they DEDUCT that $X from your gross pay, apply all taxes on the remaining pay, then "give" you the $X per diem BACK. It is like getting "paid" $X tax free. But it also means that you will not pay Social Security Taxes on that $X, your "income" that is used to figure out worker's comp and unemployment is lowered as well. ALSO, it LOWERS the "income" that is used to figure out if you can get a LOAN to buy a house, or that new car your wife is "holding out" for.

 

In order for it to be NOT "deceptive" the EXACT terms MUST be spelled out in the contract as it is signed. If the EXACT TERMS are not spelled out in the contract, AND their website says something different, it MIGHT be considered DECEPTIVE and would be unenforceable.

 

There is other deductions other than $59 for meals. If you pay for showers, gadgets for your job, cell, inverters, fridge, other things I don't know about.

 

Okay, here's the fact check on this.

1. The company suffers a financial hit when giving per deim because they can only deduct the per deim at 80% while salary is deducted at 100%.

2. At 0 cents take back this is a win for the driver in terms of less taxes paid and a loss for the company in terms of deductions with no offset

3. at 1 cent take back this is still almost always a win for drivers and a break even for companies.

4. at 2 cents this is usually a break even for the driver and a win for the company

5. at more then 2 cents its just the company giving it hard and fast to the driver.

 

OK so now that makes better sense. Do companies use a per mile value to determine their "Per diem" or do they give a flat amount per day?

 

I am going to have to call my tax guy on that. AFAIK they get 100% on the perdium. Even if they can only do 80% it is a cost of doing business and they are charging you for it.

I talked to three recruiters this week. Falcon, TMC, and Huff and Puff. None of them have perdium.

 

I'd assume its a fixed cents-per-mile rate, because most of us are paid in cpm. They figure the rate so that no one in the company will exceed the IRS flat rate on a daily basis during the course of the year.

No, they don't have to do anything about per-diem if they don't want to. In that case, its up to your CPA (that's not HR Block if you want someone who has a clue) to claim it on your tax return.

 

getting paid per diem was weird. If you have a really bad week $200-300 you can actually make more in the per diem. It is sort of figured/averaged for the year based on how many days you are averaged out= there is a min/max they can pay you per diem and if they are not in that range by the end of the year they must make up for it /take away.

Per Diem pay was paid by cpm though = magic variable x a cpm.

=I was out all week but didn't run any miles = you still get a per diem check. $150-200

=this sort of math adds to the per diem confusion -but pay (cpm) and per diem (based on days away from home) are really very different. If they would just state it as: days out x (per diem per day x .80) it would make more sense for drivers. It is actually easier just getting all your log books for the year and just figuring it out yourself (IRS has a per diem PDF file you can download) = pretty much guaranteed to get a few thousand back on taxes at the end of the year = a sort of truckers savings plan.