Per Diem is Great...

First off I'm not a tax professional, just trying to help some others who may be in the same situation I was in when signing on with a company. Now back to the topic. Per diem is great for any company out there, but at what cost to you? Let's take a look at some numbers.

Let's say you work for a larger company that has 2000 trucks. Let's also say that every driver elected to receive per diem pay. Most companies I've seen offer something like 10 cpm per diem but at the costs of losing 2.25 cpm to receive the per diem. So let's crunch some numbers with these figures.

All drivers average 3000 mi./wk:
3000 x .0225 = 67.50 (this is your weekly paycut to receive per diem)
67.50 x 52 = 3510 (yearly paycut)
So right off the bat you just took a nice paycut to receive per diem. But you bring home more money per week they say because you get 10 cpm untaxed. Well that comes out to 300.00/wk untaxed. If you do not receive per diem pay at the end of the year you can write off 41.60/day every day you're in the truck, which comes to 291.20/wk. So you just took a paycut of 67.50/wk to receive 8.80 untaxed. But wait there is some good that came from you and everybody else at the company receiving per diem. Ya'll just saved the company big money. 3510 from you and everyone else a year comes to 7,020,000. That's right your company just saved 7 million dollars by doing nothing at all. Good stuff right? But that doesn't include the money they save from paying into your social security and workers comp should you get injured.

Let's crunch some more.
All drivers average 2500 mi./wk:
2500 x .0225 = 56.25
56.25 x 52 = 2925
This week you only received 250.00 untaxed. Had you not been on the per diem plan you could have still written off the 291.20 at the end of the year. So you just paid 56.25 so you could get less money untaxed now rather than more at the year's end. Company saves 5,850,000/yr. You're a good employee for saving the company money and you're pocketing more money yourself every week. You're just losing in the long run. To each his own though. The more money other people give my company the less they'll want from me.

Some other factors may come into play such as tax situations I don't have to deal with by being single and having no dependents. May be best to talk to a tax specialist if you have special tax issues. Some states also do not allow per diem claims so you may be better off taking the per diem plan if you live in one of those states. If your company does not cut your cpm to receive per diem you may come out alright as long as you keep your weekly miles close to and above 3000. If you're a trainer or team driver and get paid all the miles of the truck then per diem may be good depending on the cost to you to receive it. But remember that Uncle Sam keeps an eye on these per diem plans and can come after you at the end of the year if you receive more than 52.00/day per diem. Good luck and Be Safe.

 

Thx for the Welcome. And War #### Eagle!!! Pat. I can't believe how horribly we suck this year but I will always bleed orange, a little more with every loss. Ya'll are gonna get spanked like bad girls in the championship . Florida is imo the best team in the nation and even better since they lost to Ole Miss. Tebow already managed to break Emitt Smith's rushes for td record. What's a Florida guy doing rooting for a lousy bama team anyway , jk take it easy man and good luck in atlanta.