cpm on diem

In addition, while many of the other major carriers have recently increased their cpm pay to attract new drivers and retain the one's they have, May's "solution" was to offer a per diem program. To the untrained eye it seems like a good deal, but in my opinion, it was a sleight of hand move

 

Its a mixed bag as far as I'm concerned. If its manditory - you're stuck. If it's optional, then its worth considering if they don't get a penny or two kicked back for "administrative fees."

 

Yeppers it is. I too am glad it is an optional program. If not, I would of taken my services elsewhere.

 

Ironpony, I agree with you. I am analyzing this in another post. It looks like it can be of value. If they take money for doing it - RUN AWAY.

 

Companies wouldn't offer per diem pay if they didn't financially benefit from it. What they pay for your SS is one example. The percentage they pay is based on your gross.

I believe that applies to what they pay into the "system" for your unemployment and workman's comp if I am not mistaken.

The fact that lower gross can also impacts one's ability to get a loan has already been mentioned.

 

Per Diem is a good deal if...........

1. You never get injured and can't work.

2. You never want to retire.

 

Now that my BF's been getting paid (with this company for about 5-weeks now), it looks like he may be nailed on taxes next year. The past few checks, while decent take-home, only show about $12 deducted for Fed taxes and none for state (AZ) - which is the one that usually gets people in the end.

Also, they are splitting his pay to $0.185/mile driving and $0.135/mile for per diem pay. While this still works out to what he was told he'd be paid per mile, this doesn't seem like the "2-cents/mile" like they said they'd be charging for the per diem. I'm worried that he'll end up having to PAY taxes to the Feds since this company used this method to calculate his deductions.

How has this worked for others out there when tax-time rolls around? Do you get nailed with a high tax bill instead of any sort of refund or even just breaking even?

 

while decent take-home, only show about $12 deducted for Fed taxes and none for state (AZ) - which is the one that usually gets people in the end.



and none for state (AZ)

Arizona came out last year with their own w-2 for with holding. He may have to ask May for it or go online and print and fill it out and turn it in. It use to be based on percentage of Federal held which sounds to me like may not be enough, but they changed the way they do it. Hope this helped!

Thanks but I checked his paychecks and yes, even though he filled out the new A-4 (AZ's version of W-4) when he was hired which is based on X % of his gross income just like Fed form, the company is not deducting taxes from Gross wages - they are not including his per diem as part of the Gross wage but treating it as "untaxed income." There's still less than $5 per week being pulled for state taxes. I'm a bookkeeper and have seen plenty of people get nailed on the state taxes for not having enough withheld. If the company is only deducting taxes on his "mileage" pay and not the per diem, then he's still going to be held liable for that "untaxed" income next year. This is what we're trying to avoid.

What I'm getting at is that he's getting roughly $200/week as per diem pay. If this stays the same for the year, that's about $10,000 of income that was NOT taxed by the feds or the state. Guess who gets to pay the taxes on that $10-K come April 15th?

Not a good scenario.
Nunu62

 

He can always refile his W-4 and A-4 and specify an increased withholding. That's what I did after getting nailed for Ohio state taxes 3 years in a row. It was never for much, but I hate writing out that check. A-4 allows the employee to elect the percentage of gross taxable income withheld as well as additional amount.