Per Diem paid by company vs. not?

One thing to consider is whether a company driver even has enough deductions to itemize at the end of the year. If you can't write off the per-diem because of the tax situation, then accepting a per-diem payment is a way of decreasing your taxes. You still make the same total income, you just give less of it to Sam.

The real question you need to ask, is does the company withhold any of the per-diem amount as an "administrative cost?" For example, I've heard Marten withholds 2-cpm for the "privilege" of being paid per-diem. Now that's where the rip-off is.

Nunu62 - your hubby isn't expected to only spend $6 on food per day. Its a way of defraying his costs while on the road. The per-diem amount that a company uses is based on the average number of miles all drivers rack-up in a year, and then set to not exceed the $59-per-day IRS limit.

 

There's no set amount ironpony. One thing I learned on this forum is the perdiem allowance varies greatly among companies.

I worked 10 months last year until I went home on medical leave. My last pay stub says I made $35,000. My W-2 says I made $22,000 last year. No where on the W-2 says anything about $13,000 in perdiem they claimed or that I grossed $35K. I believe they are hiding the money for their benefit. It sure didn't help me.

 

That's not what I wrote. Try READING it.

 

Thanks for your explanations - they are helping me/us understand a bit better but it's still confusing. One other question...

Since this is the first time he's run for a company with the per-diem issue, is the per-diem pay still included in the weekly checks or paid at the end of the year? He's still waiting on 1st week's check to see the tally but is worried about how much he'll make after taxes. He's just hoping that he won't get nailed during tax-time for X-amount of "untaxed income" since this is technically what the per-diem is, right?

Guess we'll have to find a good tax guy who knows about trucking to make sure he gets as much back as he can.

Thanks.

 

My experience with it was that the entire sum was paid in each settlement - its usually just indicated how much was paid as income and how much was per diem. If you go back and check the gross amounts divided by the miles run, it works out to the per-mile rate they promised. If it doesn't contact payroll. Only the income is reported on your W2... they may show the per-diem amount, but it will be classified as non-taxable - also a good thing to check when you get the paperwork.

Payroll types do make mistakes, so its always a good thing to double check.

Its not all good though. Because your total taxable income is decreased by per-diem payments, you can't always get credit for that with a loan officer. SS payments and workmen's comp payments would also be less.

 

I did read it tempermental. You still don't make the total income if they don't put it on your W-2. You read what you wrote, lol.

 

See that's the part that worries me. When I was receiving alimony a few years ago, it was "untaxed income" and I had to pay the taxes on it at the end of the year. OUCH! No tax returns for me - only paying more to the Tax Man.
I'm just afraid that this "untaxed income" may screw him up if he wants to buy a car or needs to qualify for something else. When his company closed up shop a while back, unemployment only qualified him for $240 max a week - and that was after having reported income of over $40K for the previous two years; I dread to think what will happen if reported income is reported at less than actually made. I'll keep my fingers crossed that all this works out.

Thanks ironpony and everyone else who's been so helpful.

 

I think they should do it like construction companies do. Pay you $400 or so a week seperate...