A Truck Driver’s Guide to Per Diem Pay
“We offer per diem pay!” You see this phrase a lot on trucking job ads, but what exactly is per diem pay? How is it different from your normal paycheck? We spoke with Jodi Nevills, payroll and billing manager at Dynamic Transit, to explain.
What is per diem pay?
Per diem is Latin for “by day” and is the daily amount established by a company, following Federal guidelines, to cover an employee’s cost for food and incidental expenses related to travel. A set per diem rate eliminates the headache of expense reports, reimbursement forms, and wads of receipts stashed in the overhead visor.
How does per diem pay work?
The federal limit is currently $63/day. Dynamic pays the full allowed amount of $63 to their drivers for every day they’re on the road. Per diem is not issued by a separate check or as a separate amount and is not in addition to income. The benefit of per diem is that it isn’t taxable income.
Consider this example: You drive for seven days and your weekly paycheck is $1,200. You earn $63/day ($441/week) in per diem cash, which is not taxable. So your total taxable income is $759.
Now let’s pretend we live in the perfect world where taxes are only $100/week. Your taxed income comes to $550, but your $350 in per-diem is added back into your paycheck, so you take home $900. If that seems confusing, just know this: per diems are a great perk to any trucking company.
Keep in mind, drivers at Dynamic will actually make more per diem pay than the above example, so you are taxed even less driving for Dynamic.
Per diem is earned money that isn’t taxed, and Dynamic is already doing the accounting work for the driver come tax time. That’s a relief when you consider all of those receipts you’ve had to chase across a windy parking lot in the past.
How does per diem benefit truck drivers?
Dynamic driver James Smith is thinking ahead. He’s been in the trucking industry long enough to know per diem pay isn’t easy to come by. Especially with a midsize company like Dynamic. He thinks of per diem pay as a way to help truckers invest in retirement. His advice is to learn to live off of your income before per diem pay and then invest the per diem amount. He places his extra pay into Dynamic’s 401K profit sharing program. If you’re not in a place where you can yet invest, use the per diem pay to manage your debt so that you can get there. James says, “It’s a win-win! Why wouldn’t someone take advantage of that?”
Interested in taking full advantage of per diem pay? Contact us today and start trucking with Dynamic.
Dynamic Transit Company does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. To learn more about per diem pay, consult your own tax, legal and accounting advisors before engaging in any transaction.
2 thoughts on "A Truck Drivers Guide to Per Diem Pay"
Way cool! Some very valid points! I appreciate you writing this post and the rest
of the site is very good.
Feel free to surf to my site free mp3 download
No matter if some one searches for his required thing, thus he/she desires\r\nto be available that in detail, thus that thing is maintained over here.\r\n\r\nFeel free to surf to my webpage : ytmp3