Per Diem is Great...

panhandlepat · Nov 15, 2008

DirtyDawgJake said: ↑

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.
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yea i am definately worried about tebow and co!!
i grew in b'ham BTW great game today i thought they were gonna get it done.

SVTStingRay · Nov 15, 2008

DirtyDawgJake said: ↑

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.
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can someone explain this like if you were explaining it to a 5 year old.....taxes argh

schlepper004 · Nov 15, 2008

stingRay-

It's this simple, you take the per diem company gives you, and you are handing them more than $3k that Uncle Sam would be giving you at end of year...

The company likes to sell it as a 'benefit' to their drivers, so they can save $ on all the postage and thank you cards they would otherwise be sending...

simple enuf?

panhandlepat · Nov 15, 2008

schlepper004 said: ↑

stingRay-

It's this simple, you take the per diem company gives you, and you are handing them more than $3k that Uncle Sam would be giving you at end of year...

The company likes to sell it as a 'benefit' to their drivers, so they can save $ on all the postage and thank you cards they would otherwise be sending...

simple enuf?
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AND some Co's (USA for one) will actuall pay you less per mile if you take it. SUPPOSEDLY because because they have to pay more taxes on you, which is an outright LIE!!

DirtyDawgJake · Nov 16, 2008

panhandlepat said: ↑

yea i am definately worried about tebow and co!!
i grew in b'ham BTW great game today i thought they were gonna get it done.
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I already marked them and ya'll as losses so no surprise here. I just can't wait for it to be over, oh the humanity. Would make my season though if we could somehow manage to make it 7 in a row against ya'll, would take a miracle from a greater power though I believe. Nice whooping on MSU. Just saw where LSU almost got beat by Troy. Man what an upset that would have been, on homecoming at that.

The Hardcard · Nov 16, 2008

Yes, I am getting 2 cpm less on per diem. The company maintains that while your gross is less, your net is more. I am going to opt out in 2009 for sure.

jlkklj777 · Nov 17, 2008

There was a similar thread on this Per diem issue a while back. I will post the link here so others may view the discussion.

http://www.thetruckersreport.com/tr...ions-from-new-drivers/50134-starting-pay.html

I took the time to break it down for this new driver in the above thread. Perhaps this will help some other drivers faced with the choice of whether to take per diem or not.

RYITO1122334455 · Nov 17, 2008

with my company if u take per diam, you get a weeks vacation every 6 months paid, however its the only way to be eligibale for ANY bonuses, idle,saftery,or milage ...so its good and sucks at the same time

schlepper004 · Nov 17, 2008

RYITO1122334455 said: ↑

with my company if u take per diam, you get a weeks vacation every 6 months paid, however its the only way to be eligibale for ANY bonuses, idle,saftery,or milage ...so its good and sucks at the same time
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Well that gives you a great idea of how much the company is saving if they offer ALL THAT only if you take a per diem... in other words, the per diem is worth the cost of all that AND MORE.

Roadmedic · Nov 18, 2008

schlepper004 said: ↑

Well that gives you a great idea of how much the company is saving if they offer ALL THAT only if you take a per diem... in other words, the per diem is worth the cost of all that AND MORE.
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Then you get screwed when a workmen's comp claim is filed or try to get a loan because they are paying you less income. It will also affect the SS income later in life.

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