The company I drive for just offerd me per diem pay witch I believe he said was $45 per day and non taxable. Can I get some advice?

 

If you have a choice, it's simple - don't take the per diem.

Yes, you'll have more bring-home money. However, it will bite you in the ass later on. The Per Diem is non-taxable income, meaning that if you're injured and have to go on Workers Comp, that part of your income doesn't count. The same goes for Unemployment and later on in life, your Social Security.

 

Yeah, what he said.

 

The only reason an employer offers per diem is it saves them money for they don't have to pay out as much in payroll taxes. Our company is always trying to cram it down our throats about what a tax advantage it is to us and they even went so far last year as to send out letters to all drivers who were not on it which said they had determined it would be in the drivers best interest to be on per diem based on that drivers payroll history.Yeah right, a trucking company that actually gives a darn about their drivers personal taxes. :roll: They then went on to say that if you did not respond by January 1st of this year they were going to automatically put you on it. A lot of drivers were pissed for they don't go home often and they didn't get this notification until the per diem started happening. Needless to say payroll was swamped with calls.

 

Like has been agreed by the others - do not take the company per diem plan, in must cases it screws you up when you file your taxes!

The rate for filing in 2007 was $52.00/day and you claimed 75% on your taxes! When the 2008 filing comes around it will be $52.00/day, and claim is 80%.

I posted some links in another related string a little earlier to some IRS documents!

Budget yourself when on the road, and you will come out better at the end of the year on your taxes! A friend took the company per diem plan, and paid substantially more on his year end taxes then I did!

Good Luck!

 

Per Diem
Saves the company money
Provides some additional cash to you
Makes your W-2 look funny
Hard to explain to others how you get from number of miles to net pay

Should you take it:
ask the question, how much a week additional on your take home would make a real difference in your life. If you are thinking it's going to add hundreds of dollars to each check - think again.

 

Do not fall for the sales pitch of Per Diem putting more money in your pocket, it potentially will (less than $100 per week). The company wil tell you they do not benefit from this, although they do. I saw a detail of how they do it. They actually will cut your cpm (gross pay) by the equal of the per diem that they will add back onto your gross pay as per diem. For instance, If your paid .29cpm (gross) they will subtract .10cpm from that leaving a gross pay of .19cpm. Then they wil add your per diem on .10cpm (untaxed) bringing your pay back to .29cpm. Its the untaxed portion that will "increase" pay. But can cause nightmares when time to file your income tax. Some companies will even charge up to .01cpm from your pay as a "processing fee".
Its best to keep your full cpm pay (gross) and at the end of the year claim the deduction of $52 per day x .75 x the number of days away from home.
My opinion, this is one of the biggest "scams" a company will offer you.

 

ask them if you can take the per diem and stay at the same pay rate, WHEN they say no, ask them why not, they wont have a good answer, they will have an answer but not a good one

 

It screws up social security, workmans comp and un-employment (although that is a joke to start with) - the company also has to pay less of a share on the social security side of things! The don't benefit, yup, that is a joke!

 

I'd rather have any disability/comp calculated at $45k per year compared to $25k after the Per Diem.