Starting pay

That sounds like great pay. Who is it?

 

WHY in the world would ANYONE sacrifice money per mile for per diem???
The per diem is YOURS anyway. You get the deduction when you file your taxes. In the meantime the company shorts you money all year long AND shorts you on the social security and medicare taxes they should be paying on your behalf and you think this is good?

Sorry buddy you are about to make a BIG mistake.

Take the straight pay and tell them to shove that per diem nonsense where the sun doesn't shine.

Spend some time reviewing posts and threads regarding per diems to get a better understanding of what per diems actually do to your pay over all.

 

Amen to that brother. With how screwed up this country is financially, nobody outside of the baby-boomers will ever see a dime of their S.S. money, unless they have some injury and are unable to work anymore.

But what irks me, is that I've paid in my fair share (as we all have) into Medicare/S.S/and whatever else, and we wont see a dime of it, because in 15-20 years it will be a bankrupt system.

 

I can see why you THINK the per diem is a good idea. Let me show you some figures based on your submission.

Lets assume you will average 2500 miles per week (pretty easy to do actually) for 52 weeks out of the year=130,000 miles.
Based on .34 cpm hhg miles your yearly earnings would be $44,200.00.
This gives you an average paycheck of 850.00 per week (gross) based on 52 weeks of work.
Based on an average tax rate of 28% ($238.00 deducted for taxes) this leaves you with $612.00 net.

Now lets say to earn that $44,200.00 you spent 312 days on the road (6 days per week).
312 days x $52.00 per day = $16,224.00 x .80% = $12,979.20 deduction off of your gross earnings leaving you with an agi of $31,220.80.

Now of course you will have other deductions to help lower your agi even further but that is not the point of this exercise.

Now lets look at the "per diem" plan offered by Millis. You stated that for hhg miles they are offering .29 cpm (you did not state how much of that .29 cpm was to be for the per diem but in my experience it is usually .07 to .08 cpm). Regardless of the actual amount you can use the formulae to determine the actual costs yourself if it is different.

Using the same number of days worked (312) and using the same number of miles turned (2500 per week) lets look at the difference in pay.

130,000 miles x .21 cpm (taxable) = $27,300.00
Perdiem pay of .08 cpm x 130,000= $10,400.00
Total earnings for the year $37,700.00

Your eligible for more per diem pay so lets factor that out now.
312 days worked x 52.00 = $16,224.00 x .80% = $12979.20 in eligible per diem pay. Millis will have paid you $10,400 already so we deduct that from $12,979.20 for a total of 2,579.20 in additional money you may deduct from your agi. This drops your agi (adjusted gross income) to $24,720.80.

You specifically asked about weekly pay though so lets figure that out now.
2500 miles x .21 cpm = $525.00 gross pay
Based on average tax rate of 28% (147.00 deducted for taxes) this leaves you with a net of $378.00 Now we add in the per diem pay.
2500 miles x .08 cpm (non taxed per diem) = $200.00 added to your net of $378.00 gives you a check of $578.00.

So based on this example you will LOSE $34.00 per week in your pay check.

Now lets see how much money Millis got away with not paying into social security and medicare on your behalf.

130,000 miles x .08 cpm = $10,400.00 x .075 % (the amount an employer must pay into social security and medicare on behalf of its employees. The employee pays an additional .075 for a total of 15% together) = $780.00.
You also got away with not paying $780.00 on this per diem pay option which means your social security and medicare contributions for this particular year is reduced by $1,560.00

Now lets be realistic here. Why would you forfeit money each week AND short your contributions to ss and medicare each week as well as accept LESS money for the job you intend to do?

Time to man up. Pay your taxes. Make your employer pay its fair share of taxes. Play it straight and you WILL get out of the financial hole your in.

 

GREAT POST! PER DIEM, MY BUTT. IF IT SOUNDS TOO GOOD TO BE TRUE...............

 

Only a small problem with the figures.

The deduction from AGI is limited by 2% of the AGI. 754.00 would be out of the calculation.

This also would then assume he had additional deductions to even use to exceed the standard deduction which I believe he would not. It would then negate the arguement here on the loss side a little.

But by all means, I do not support or even condone company paid per diem plans. They are only there for the benefit of the company. It saves them money, not the driver.

 

I must confess I am not sure about this 2% figure road medic is using. If the driver did not enter into a per diem plan through his carrier then the 780.00 each ($1,560.00 combined) would have been contributed to the drivers social security and medicare funds.

I was attempting to illustrate WHY carriers offer "per diem" plans. The proof is they SAVE money on taxes for every driver they get to accept this plan. Some even low ball the per diem plan and offer less cpm overall just to get the "per diem" claiming it is a "tax benefit"
(yeah right for THEM!!!).

I did not even go into the .03 cpm discrepancy in pay Millis is citing on their website (I checked to be sure of the numbers) between the 2 plans. That alone accounts for a $3,900.00 savings to the company (a reduction in pay to the driver).

I truly hope drivers will take the time to learn about these plans BEFORE agreeing to them.

After coversing with Roadmedic I understand his point now. He is referring to the actual amount that is permissible to deduct when itemizing. Based on the Agi 2% of the allowable per diem would be lost. I believe this is the same concept for medical deductions when Itemizing although that floor is 7 1/2% of agi I believe. Anything over and above these floors is what is actually deductible.

Of course I am NOT a tax expert and I use Turbo Tax to figure my taxes each year so many of the calculations are done for me without me even realizing what it did. I do try and keep abreast of tax laws and changes specifically in the trucking industry. Why? Because I am CHEAP! I am not paying any more than I have to.