Per Diem Question

That's another trick they use to save themselves money. They tell you that you can be paid a cent or two less per mile with the per diem and take home just as much because no taxes are being withheld from the per diem amount.

For example, if you are earning $0.35 per mile and the entire amount is considered your "wages", you pay income taxes (state & federal) and your share of the employment taxes (FICA) on all $0.35 per mile. So, you might give up $0.10/mile in taxes leaving you with $0.25/mile take home pay.

So, if they pay $0.10/mile per diem and $0.22/mile as "wages", you're getting $0.32 per mile instead of the $0.35/mile under the straight pay. However, your taxes are only based upon the $0.22/mile. So, you'll only pay $0.06/mile in taxes leaving you with $0.16/mile take-home "wages" plus the $0.10/mile per diem....for $0.26 per mile total on your paycheck.

So they push the per diem (remember, it is better for THEM if you do) saying that "Sure, on paper you earn less...but you take home more!" Meanwhile, they are paying less employment taxes to the government AND paying you less per mile. In essence, they are taking the deduction away from you and pocketing it for themselves.

 

Per diem rate for 2011 was $59 per day, of which you deduct 80% from your gross, for every day on the road. Except the day you leave home and the day you get back. Those count as 3/4 days, each.

 

the going rate was 58 last year.

 

one ohter thing to keep in mind also. is that perdiem isn't inculded with your income.

you make 35g but ten of that was perdiem. your reportable income is 25g. hope you don't plan on taking out a loan on 25g.