Per Diem Pay: Maximizing Your Take-Home Pay

Having a career as a professional driver is a fantastic way to make a generous living! However, we all dread seeing the impact of taxes on our final paycheck. In the past, drivers could deduct daily living expenses from their tax returns while they were away from home. Now, company drivers are unable to file itemized tax returns due to new tax laws. The new laws that prohibit drivers from filing tax returns result in drivers losing thousands of dollars in deductions.

Latin for “Per Day”

Did you know that “per diem” translates to “per day”? Per Diem related to truck driving essentially is a portion of a driver’s salary that is paid to the driver un-taxed and acts as a meal and daily expense reimbursement. Per diem pay technically labels part of your salary as a “meal and incidental expenses” reimbursement rather than taxable income. It is not counted as part of your gross income.

Without per diem pay, you are opting in to taking the “standard meal deduction” the IRS offers which equates to $63 per day when you file taxes every year. Per diem pay reduces the needs for expense reports, reimbursement forms, always keeping track of receipts and will allow you to maximize your take-home pay.

Witte Bros Per Diem Pay Program

Our pay program will increase your weekly take-home pay by changing your current base pay rate, which is fully taxable, into a combination of taxable base pay and non-taxable per diem reimbursement. This results in lower taxes and more take-home pay.

Things to Consider with Our Program

  • Participation in the per diem program only effects your base pay. It does not affect your stop pay, detention pay and other earnings.
  • Since the program reduces your taxable income, you pay less into Social Security which will reduce your monthly benefit slightly (estimated $10 per month Social Security impact for every year of per diem participation)
  • Per diem pay may not be considered income when applying for mortgages, car loans, etc.
  • Consult your tax preparer to see if the per diem program is right for your situation

Also remember, participating in the per diem program is optional. Consider all the options and benefits to ensure it is what would benefit your needs because everyone’s situation is different. For income tax purposes, getting paid per diem will reduce your gross income as a driver. Thus, reducing the amount of taxes you will owe to the IRS.

Witte Bros. Exchange, Inc. does not provide tax, legal or accounting advice. This blog has been written for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.

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