I know there have been a lot of threads on the pros & cons of per diem pay. I was wondering about the tax implications if you get paid it in CPM and go over the daily limit.
If the daily per diem is $69 and the company is paying 16 CPM for per diem what happens if you earn more than $69 (430 or so miles)? I imagine the driver is responsible for income taxes on it but are they responsible for SSI & Medicare as well? What about the company's portion of those?
Do companies cut you off at $69 and switch the pay back to what you would make without perdiem for any miles over 430 in this example?
Per Diem CPM tax implications and other questions.
Discussion in 'Questions From New Drivers' started by Turtlelegs, May 29, 2022.
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First, your per diem will not be broken down on your settlement day by day. You would need to drive more than 3,000 a week to get your per diem above $69 per day. Second, per diem is what is known as "a reimbursed employee business expense. This is not your problem. You were reimbursed. But really think about it. Will you drive 156,000 miles in a year?
Dave_in_AZ and Turtlelegs Thank this. -
Different companies run their per diem programs differently. In example, (specific amounts mentioned are for example, not the current actual figures) at Swift you get paid the same CPM rate. But, you only get paid $65, as per diem, for your first $80 earned on CPM. So, technically you lose $15 a day being on per diem. But, that $65 is classified as unearned income and is not taxed and isn't classified as earned income. For some that offers significant tax advantages and worth the loss of $15 per day in income. Also, per diem is worked out on a weekly basis, not a daily basis, so for a week, your first $560 ($80 × 7) of milage pay is replaced with $455 ($65 × 7) per diem pay.
You'd need to get ahold of your pay folks to find the details of how it runs its per diem program.Bean Jr. Thanks this. -
LTL Bull Thanks this.
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Per diem scues your taxable income for the year.
It enabled the megas to cheat the government out of billions in social security taxes.
Specifically cheating you that took it. -
I don't know how the deduction works for W2 earners, but at a certain amount it goes to 80% of $72.
I know my deduction was like $15K. So that's $15K off your taxable income that you're not going to pay taxes on.
You need no receipts. It's verifiable by your log.D.Tibbitt, Oxbow, MIT and 1 other person Thank this. -
W2 drivers can no longer claim per diem. Only way to get the tax break is through company "reimbursement ".
16 cpm per diem seems on the high side, it's usually 10-11 cpm. As mentioned earlier, you would have to drive an unrealistic amount of miles to exceed the daily limit and even if you did, it would be the company's problem as they are the ones managing the reimbursement.
I wouldn't give it another thought. -
Tb0n3 Thanks this.
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Lennythedriver Thanks this.
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If you are getting paid per diem by a company I encourage you to check out the IRS website. They have rules but companies only wanted to save themselves money so they paid per diem. For instance, you must have a residence that you pay a certain portion of to be eligible for per diem.
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