How to Calculate Per Diem for Truck Drivers: A Comprehensive Guide

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Per diem is a Latin term that means “per day.” It’s a daily allowance that employers give their employees to cover the cost of food, lodging, and incidental expenses while they’re away from home or on a business trip. Truck drivers who spend a lot of time on the road can take advantage of per diem to reduce their tax liability and increase their take-home pay. In this article, we’ll show you how to calculate per diem for truck drivers, so you can make the most of this tax-saving opportunity.

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What is Per Diem for Truck Drivers?

Per diem for truck drivers is a daily allowance that covers their travel expenses while they’re working away from home. It’s intended to help offset the cost of lodging, meals, and incidental expenses such as laundry, parking, and tolls. Per diem is often paid in addition to a truck driver’s regular wages or salary and is tax-free up to a certain amount.

How is Per Diem Calculated?

Per diem for truck drivers is calculated based on the number of days they spend away from home on business. The per diem rate varies depending on the location and the time of year. The federal government sets a standard per diem rate for each state, which is updated annually. Trucking companies can use the federal per diem rate or set their own per diem rate, as long as it doesn’t exceed the federal rate.

How Much Per Diem Can Truck Drivers Claim?

Truck drivers can claim up to 80% of the federal per diem rate for the area they’re working in. For example, if the federal per diem rate for a particular location is $100 per day, a truck driver can claim up to $80 per day in per diem. The remaining 20% is considered a taxable benefit and is subject to federal income tax withholding, social security tax, and Medicare tax.

How to Calculate Per Diem for Truck Drivers

To calculate per diem for truck drivers, follow these steps:

Determine the number of days the truck driver spent away from home on business.
Check the federal per diem rate for the area the truck driver was working in.
Multiply the number of days by the per diem rate to get the total per diem amount.
Multiply the total per diem amount by 80% to get the tax-free per diem amount.
Subtract the tax-free per diem amount from the total per diem amount to get the taxable per diem amount.

Example:

A truck driver spent 10 days working in California. The federal per diem rate for California is $110 per day. To calculate the per diem amount:

Number of days: 10
Per diem rate: $110
Total per diem amount: 10 x $110 = $1,100
Tax-free per diem amount: $1,100 x 80% = $880
Taxable per diem amount: $1,100 – $880 = $220

Additional Tips:

Here are a few tips to keep in mind when calculating per diem for truck drivers:

Per diem only applies to days spent working away from home. It doesn’t apply to days off or vacation days.
Truck drivers must keep detailed records of their travel expenses to claim per diem.
Trucking companies must have a per diem plan in place and follow certain IRS guidelines to qualify for tax-free per diem.

Now that you know how to calculate per diem for truck drivers, you can take advantage of this tax-saving opportunity and increase your take-home pay. By keeping accurate records and following IRS guidelines, you can ensure that your per diem is tax-free and fully compliant with federal tax laws.

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