what is the per diem for truck drivers

3 min read 26-12-2024

Meta Description: Discover everything you need to know about truck driver per diem rates! We break down how per diem works, factors affecting it, tax implications, and best practices for maximizing your earnings. Learn about IRS guidelines, record-keeping, and more to ensure you're compensated fairly for your travel expenses.

Per diem rates for truck drivers are a crucial aspect of their compensation, especially for those who frequently travel long distances. Understanding how per diem works and how to maximize it is essential for maximizing your income. This guide will cover everything you need to know about truck driver per diem.

What is Per Diem?

Per diem, Latin for "by the day," is a daily allowance given to employees to cover expenses incurred while traveling for work. For truck drivers, this covers costs associated with food, lodging, and incidental expenses while on the road. It's a crucial part of their overall compensation package, particularly for long-haul drivers. This differs from mileage reimbursement, which covers fuel and vehicle maintenance.

How Much is the Per Diem for Truck Drivers?

There's no single per diem rate for all truck drivers. The amount varies significantly based on several factors:

Factors Affecting Per Diem Rates:

Company Policy: Individual trucking companies set their own per diem rates. Some companies offer a flat daily rate, while others might use a tiered system based on location or trip length. Negotiating a higher per diem rate is often possible, especially for experienced drivers or those with a strong track record.
Location: The cost of living in different locations significantly impacts per diem rates. Expenses in major cities are typically higher than in smaller towns. A driver in New York City will likely receive a higher daily rate than one in rural Iowa.
Union Agreements: If you're part of a union, collective bargaining agreements often specify per diem rates. These rates are usually negotiated and outlined in the union contract.
Type of Haul: The nature of the job can affect per diem. Long-haul drivers, who spend numerous days on the road, typically receive higher daily rates than regional drivers who return home nightly.
IRS Guidelines: While not directly setting per diem rates, the IRS publishes standard meal and incidental expense allowances. These guidelines can influence what companies offer, and understanding them is critical for tax purposes (discussed below).

How is Per Diem Taxed?

This is where things get a bit complex. The IRS considers per diem as taxable income unless it's specifically structured as a reimbursement for actual expenses under a "business expense" plan.

Reimbursement vs. Allowance: If your company provides a per diem reimbursement, you'll need to keep detailed receipts to document your expenses. You only pay taxes on the amount exceeding your actual documented expenses.
Standard Per Diem Rates (as Allowance): If your company uses the standard IRS per diem allowance, this amount is considered taxable income, even if you spend less.

This distinction is crucial. Carefully review your employment agreement to understand if your per diem is structured as a reimbursement or an allowance. Consult a tax professional if you have any doubts.

Tracking Expenses and Maintaining Records:

Regardless of whether your per diem is a reimbursement or allowance, meticulous record-keeping is vital. Keep detailed receipts for all meals, lodging, and incidental expenses. Digital record-keeping, using apps or cloud storage, is often the most convenient and organized approach.

Maximizing Your Per Diem:

Negotiate: Don't be afraid to negotiate your per diem rate during salary discussions. Research industry standards and present your case clearly.
Choose Wisely: Some companies offer higher per diem rates than others. Factor this into your job search.
Track Expenses: Accurate tracking ensures you get reimbursed fully for legitimate expenses if you're under a reimbursement plan.
Understand Tax Implications: Knowing the difference between allowance and reimbursement is essential for minimizing your tax burden.

Conclusion:

Understanding per diem for truck drivers is crucial for managing your finances and maximizing your earning potential. The information presented here provides a foundational understanding; however, consulting with a tax professional or your company’s HR department is recommended for personalized guidance. By understanding the factors influencing per diem rates, keeping accurate records, and being proactive in your negotiations, you can ensure you're fairly compensated for your expenses while on the road. Remember to always refer to IRS guidelines and your company's specific policy for the most accurate and up-to-date information.