Per Diem versus Non-Per Diem

[wsclinger9869]

Can anyone advise how much of a difference it is to take a lower per mile rate of pay, but with Per Diem, versus a higher per mile rate without Per Diem. Does the driver make out better during the year on their paycheck, or do you really not see anything of a difference until it's Tax Time?

Thanks..

[Sealord]

Your tax advisor can tell you what's best for you. If you itemize your taxes, it's my opinion and experience you'll make out better not getting per diem from your employer.
Search the archives here, at truck.net, and at pumpkindriver.com as this subject has been beaten to death. BOL

[wsclinger9869]

Thanks Sealord....I'll check out those spots..

[brian]

schneiders per diem pay package blows but theirs good deals elsewhere in the driving industry.


when I worked in the oil field we got per diem because we were away from home, but they provided our housing, usually our food and used it as a way to pay us alot more without the company or us having to pay taxes on it.

[One]

I'm going trough oriantation at Tango transportation atm and most people accepted the per diem pay of 10cpm. The safety guy said he has only had a handful of people opt out of per diem pay so i was surprised. I would think that if you claim your $52/day on your taxes then you get a descent refund but if you dont and accept the p[er diem pay, you get taxed on that+ it is dependent on your daily mileage, not a flat $52/day...To me,getting the refund looks like a better deal...short of me going to OTHER trucking sites, can u guys give insight as to if it makes a diff. or not?

[GMAN]

I think that it would depend on your individual tax situation. Personally, I would not want to do it. I would have to check it again, but I believe that if you take the per diem that you cannot take the IRS flat deduction since your company is essentially paying your expenses with the per diem. On the other hand, you should pay income taxes, social security taxes, etc., only on your wages, which could lower your tax bite on wages. Some drivers don't like it since the employer doesn't have to pay his portion of your social security taxes on the per diem. Social security is calculated only on wages or earned income. The employer saves 7 1/2% of that portion of your wages by paying drivers the per diem. You could still come out ahead with per diem. About the only negative that I can see is that you will not pay as much into your social security. The tax savings on your other taxes could offset that amount and you may still come out ahead at the end of the year. As I said, each person is different. It might benefit you but not another driver. One way you could look at it is to do the math for yourself based upon this years tax tables. You didn't mention your mileage pay, so I will use $0.30/mile to do the calculations. If you are paid $0.10/mile per diem then you and your employer will pay social security only on the $0.20/mile. Calculate the average number of miles you think you will get for the year and arrive at your annual wages. Take your portion of the social security taxes off the top along with your standard deductions and number of dependents. What is left will be your taxable income. Now do the same thing but add the per diem pay. See if there is any difference in net taxable income and you will have your answer.