Per diem pay: how much do you actually take home?

The worst is companies who do it and pretend they are doing you a favor, so they also #### you over further by charging you another cpm or two. Real ######## they are.

 

NOTE (1):
There are truck drivers that LOVE the system of per diem miles because it puts their wages into a lower income tax bracket, not only for federal and state income taxes, but also for Social Security and Medicare taxes.
The extra per diem monies that have not been used can be either put away or used for other necessary expenses at home for the truck drivers' families.

NOTE (2):
There are truck drivers that absolutely DESPISE the system of per diem miles. These truck drivers want to be put into a higher income tax bracket.
These truck drivers feel that they are being CHEATED out of additional employer's contributions to Social Security, Medicare, Unemployment Compensation, Workman's Compensation, along with 401(K) and other retirement contributions that the trucking companies may have to offer.

NOTE (3):
Per diem that is being paid to the truck drivers are tax write offs that save the trucking companies many thousands, if not millions, of additional tax dollars that they would have had to pay into the tax system, (both federal and state), along with saving many thousands, if not millions, of additional dollars that they would have had to pay into the truck drivers's 401(K) plans or any other type of retirement plans that are also being offered.

NOTE (4):
If I were a CDL truck driver, especially OTR, and had a choice, I would choose NOT to take any per diem. I would want the additional employer's contributions paid into Social Security, Medicare, Unemployment Compensation, Workman's Compensation, along with 401(K) and other retirement contributions that the trucking companies may have to offer.

NOTE (5):
I do realize that per diem is often MANDATORY, whether the truck driver wants it or not.

God bless every American and their families! God bless the U.S.A.!

OTR & LTL - over the mountains - through the woods - coast to coast - sea to shining sea

The OTR & LTL truck drivers of America are positively the driving force of our economy.

 

Your tax bracket is the same, whether you are paid per diem or not, because at the end of the year you calculate the deduction the same way either way you were paid...number of nights out times the federal rate times the percentage of that rate. If you were not paid per diem, that is your deduction. If you received per diem, you compare the "reimbursed expenses" paid to you (which is what per diem really is structured to be) with the amount you are eligible to claim for that deduction. If the company paid you more than you were eligible to receive, YOU OWE TAXES on that difference, which puts you right back into that tax bracket you were trying to avoid. If the company under-paid on the per diem, then you deduct the difference.

Bottom line, company saves money, company sometimes charges you more money (for the "service" they are providing estimating your deduction for you), and makes your taxes just a little more complicated at the end of the year. In the mean time, your reported wages are lower, which affects loans, credit, unemployment, disability, social security, etc...

There really isn't any benefit to the driver. If you want more take-home pay right here and now, change the deductions you claim on the W2 so that less is withheld, so that you are somewhere between owing $100 and receiving a $100 refund. Now, you won't be giving the government that interest-free loan all year because you'll keep that money in your own pocket.

 

Most of what you say is correct, but you're missing the fica tax and Medicare tax. If per diem is deducted from your pay, those taxes are reduced. If you claim per diem as a deduction on your income tax return, you will not get credit for over payment of those taxes, nor will you get a refund of those monies.

As far as worker's comp, as a former adjuster, I calculated the average weekly wage based on the gross, not net pay, so it wouldn't make a difference.

 

Pub 463 - M&IE goes on Schedule A or C.

pages 6 and 12.

 

No.

Keep the Per Diem to yourself. Even if it is a lower mileage base pay.

At tax time, add up your OTR logbook days away from Home (More than 150 miles if I remember right) and then multiply what the Feds allow for deducting per day your allowed Per Diem. In my time it was 45 dollars times 306 service days backed by the logbooks filing under 1040, it resulted in almost 14,000 in deductions to throw against 65K in gross income. We had a refund that year instead of a huge 4 figure tax bill.

The refund is a direct result of additional withholding per payroll, we were putting 200 to fed and 100 to state each payroll so that there will never be a tax bill.

Today I think per diem is 60 dollars a day, about what you can spend buying three meals retail.

 

He is asking about part o his compensation being paid as per diem, not filing his taxes.

 

I haven't seen this brought up yet, so I will mention it.

There is one good reason to get the per diem pay, and that is when you are faced with a wage garnishment.

Whether it is for taxes, child support or any other reason - the garnishment is based on your taxable income.
Only a certain percentage of your taxable income can be taken, and child support is based on that income.
That means that you will always get the per diem pay as well as a certain percentage of your regular pay to live on.

 

Pay attention ... the question isn't important, it's what's said in the answer.

 

Pay attention the question isn't important?

As in the OP didn't actually know what he wanted to ask?

Pay attention? LMAO....

Shut up stupid