Forced Per Diem

Yep.

But, most live paycheck to paycheck & never see the big picture & long term implications.

They just see that their take home is "bigger" every week.

Some do not realize that they can claim this on their own at tax time. Some just prefer the convenience of not having to deal with it themselves.

Big one that burns me up, is when I see companies that say per diem is part of your "compensated" cpm, or call it "additional" pay.

Everyone OTR & away from home is eligible for this on their own come tax time.

 

First, yes it does help lower the companies tax liabilities. What's wrong with that? If you're not paying your portion of that same tax why should the company pay it?

Second, how does it cheat the driver? Is it because of the mythology that it reduces your ss benefits if the company takes it out of your check vs you claiming it on your taxes at the end of the year? News flash, whether you claim it on your taxes at the end of the year or the company does it for you, it's still the same amount that goes into your ss benefits and is the same amount of taxable income your 1040 will show.

What you do need to make sure you do is calculate the per diem you should get each year and make sure it matches the total the company claimed. Most of the time what the company claims is less than what the IRS number would come out to.

 

8 cent per mile.

 

Frist what trucking companies are calling per diem is not really per diem, Per diem is an daily amount the company pays to an employee per day to cover expenses while traveling on company business in addition to their pay, not part of their pay, hence the name per diem. Trucking companies have found a way to avoid taxes by basing it on part of your pay, it lowers your ability to get a loan, mortgage, it lowers your SS benefits, It lowers your disability benefits if you ever need them. Do you really think that they are doing this to help you?, the fact that some charge for this "convenience" should tell you that they are not. If you are happy with it good for you, but don't try to say it's no big deal because it will be a big deal down the road somewhere.

 

Companies that use Per Diem deductions as part of your pay also make it harder to compare pay againsts those that don’t. You cannot clam the portion of Per Diem that the company has already used on your tax return at the end of the year. A company that pays you 40 cents per mile while claiming 8 or 10 cents of that as Per Diem is actually paying you less than a company also pays 40 cents per mile that has no portion of the pay as Per Diem.

Look into Will Trans/Jim Palmer. They haul loads for Prime but do not have any Per Diem as part of your pay.

 

It is true that it lowers the gross income banks look at for loan eligibility, just as any large tax deduction does. But, if one takes just one days worth of per diem into a Roth IRA every week, depending on age of course, it will more than make up for any slight reduction in SS income.

 

Per diem is just another way to chisel a driver from his wages,they don't pay taxes into your ss account.I can tell right away these guys are cheap skates and probably continues in other ways throughout the company...run!

 

Because there is no deduction for Roth IRA contributions putting untaxed money into it means you not only get the benefits of wealth accumulation but you don't have to pay taxes on it now or later.