Everything About Per Diem for Truck Drivers

What is per diem in trucking?

You may have questions regarding truckers’ per diem compensation, whether you’re new to truck driving or are currently looking for a new position. Per diem prices are useful to remember while creating a budget and organizing your excursions for owner-operators and business drivers.

Table of Contents

What is per diem in trucking?
Why do you need per diem for truck drivers?
- How does it work?
Per diem for self-employed truck drivers
Per diem rates for a truck driver
How much is the average per diem for a truck driver?
How do per diem rates affect taxes?
- Per diem tax deduction for truck drivers
- New Tax Laws

Why do you need per diem for truck drivers?

Per diem pays for truck drivers is money truck drivers receive that is not taxed and used to pay for meals and other expenditures while working and away from home. Per diem is the name of a tax deduction that owner-operators are entitled to.

How does it work?

When working away from home, per diem can cover incidental costs like housing, food, and baths. In essence, you’re using this money to pay for any travel costs you would ordinarily pay back home.

For truck drivers, there’re not many per diem rules. You will only need to provide receipts or request payment if you’re a corporate driver for these costs. Because you won’t have to file documentation and the business won’t have to handle a reimbursement, this makes things simpler for you. Per diem is paid by various companies in various ways. Others in the transportation sector add a per-mile fee to your usual take-home income, while some, like TransForce, give you a credit card before your journey.

Because the employer normally won’t pay more than the per diem fee, keeping your spending within the permitted amount is advisable.

From a practical standpoint, per diem for truckers alters your pay because your salary is divided in half. Your ordinary taxable take-home pay is represented by the first half, while the second covers some travel-related expenditures. However, despite the fact that per diem income is meant to cover your costs, how much you get depends on how far you’ve traveled.

Technically speaking, per diem money is not a source of income. It is a non-taxable type of compensation instead. Even if your employer reimburses you, you will still be responsible for your food and lodging. The fact that per diem money for truck drivers is not regarded as taxable income affects truck drivers in a variety of ways.

Per diem for self-employed truck drivers

Owner-operators can really benefit from the new per diem regulations for truck drivers since you can deduct per diem costs at the higher standard deduction rate. However, for owner-operators, the truck driver per diem tax deduction is more challenging since you must itemize your daily expenses and complete your tax forms accurately.

Per diem rates for a truck driver

The fact that business drivers are no longer required to itemize their deductions has significantly altered the situation for employees. You will get a predetermined sum as a standard deduction even though you will still be compensated for your travel expenditures. Under the Tax Cuts and Jobs Act, this amount increased, and several trucking companies also raised their per-diem cents per mile (CPM) rates.

How much is the average per diem for a truck driver?

Your firm will choose how much the daily per diem for truck drivers will be. When filing your taxes at the end of the year, owner-operators can deduct per diem costs for a larger refund. For corporate drivers who must choose between the two options listed below:

You receive per diem benefits if your employer pays your costs. As a result, you report less gross income and are no longer eligible for the standard deduction.
You may only write off costs as lost revenue if your employer compensates them. You may now deduct more money using the new, higher standard deduction.

However, there are certain requirements for eligibility, so check with your employer first. It would be best if you worked in the transportation sector and were frequently away from home as part of your employment. The length of time you have worked for the organization and the miles you have driven might also be considered. The new regulations may benefit drivers and owner-operators even if not all transportation businesses have a per diem plan.

How do per diem rates affect taxes?

Per diem tax deduction for truck drivers

For costs spent in the tax years 2021 and 2022, there is a new tax benefit to be aware of. The Taxpayer Certainty and Disaster Relief Act of 2020 changed the deduction for meals purchased from restaurants from 80% to 100%. This will make figuring out your per diem deductions while filing your income tax returns considerably more accessible if you’re an owner-operator.

New Tax Laws

Truck drivers who work in the transportation sector are eligible for a “standard meal and incidental expenditure” deduction or so-called per diem pay, according to IRS Publication 463, Travel, Gift, and Car Expenses. The 2017 Tax Cuts and Jobs Act modified business drivers’ requirements compared to owner-operators, which is where the revised per diem laws came from. Since per diem, pay lowers your gross income, you can either pay less in taxes or get a bigger tax refund.

The per diem will affect your tax responsibilities, whether you own a vehicle or drive for the corporation.

Does the per diem change depending on where you ship the load?
For corporate drivers, you must review your employer’s per diem program policy to see what factors impact your per diem rate. Because every business is unique, the policies might be challenging. Therefore, before enrolling in the program, make sure you are completely aware of their per diem policy.

Owner-operators continue to get the same daily rate as long as they are on the American continent. The standard per diem charge for truckers is $74 per day if you travel by car outside the continental United States, such as Canada.

Keeping your on-the-road costs for truck drivers within the per diem allowance may initially be difficult. Still, there are many internet tools available to assist you in maintaining a healthy lifestyle and a tight budget when operating an OTR vehicle.

However, there are certain requirements for eligibility, so check with your employer first. Per diem rates for OTR, truckers imply you must work in the transportation sector and frequently be away from home as part of your employment. The length of time you have worked for the organization and the miles you have driven might also be considered. The new regulations may be advantageous to drivers and owner-operators even if not all transportation businesses have a per diem plan.

Logity Dispatch provides dispatching services for owner-operators and truck fleets across the United States. We are proud to support the transportation industry and always prioritize the hardworking people who drive the country forward. If you want to learn more about our services or company, don’t hesitate to contact our team.