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5 Tips on How to Convince Truck Drivers That Per Diem is Good For Them

In the world of trucking, staying informed about financial strategies can significantly impact a driver’s take-home pay. One such strategy is the implementation of per diem. Although this may take some convincing on both company and drivers.  But once each are able to learn the benefits, it’s usually a no-brainer.

Let’s dive into why per diem is a game-changer for both truck drivers and your company. Also, how you can effectively communicate these benefits.

Perdiem - Tax Savings:

With per diem, drivers can lower their taxable income and benefit from significant tax advantages. Truckers can reduce the amount due to income tax by receiving a portion of their compensation as per diem, which is a daily allowance for expenses made while traveling. The IRS allows this allowance to be tax free. It is important to show them how this tax-saving strategy puts more money in their pockets.

Per Diem - Increased Take-Home Pay:

The direct effect of per diem on a driver’s take-home pay is among its most compelling features. Drivers have strong incentives to use this strategy when they realize that per diem increases their net pay.  In addition to putting more money in their pockets, per diem is decreasing their tax responsibility. By providing precise numbers and examples to your drivers, it will help make a per diem plan an easy decision.

What is Per Diem

Tax Cuts and Jobs Act:

Per diem costs were significantly impacted by the Tax Cuts and Jobs Act (TCJA) of 2017 for the tax year 2018 and afterwards. The removal of various itemized deductions, which had an impact on unreimbursed employee expenses like per diem allowances, was one significant change. Before the TCJA, workers’ personal tax returns may allow them to deduct these business-related expenses, including truck drivers. But this deduction was removed when the TCJA went into effect. As a result, truck drivers were unable to deduct their per diem costs from their individual tax returns.

Gaining a Competitive Edge in Hiring:

Trucking companies may find an increase in driver retention by providing a per diem program. Drivers are more likely to select and remain with companies who show a dedication to their welfare than those who do not realize that per diem is merely a cash benefit.

Bottom Line:

It takes a combination of direct communication, real-world examples, and an emphasis on how per diem improves truck drivers’ financial well-being to persuade them of its advantages. Drivers can view per diem as more than just a concept; by emphasizing its tax benefits, higher take-home pay, ease of tracking expenses, competitive advantages, and enhanced financial flexibility. Per Diem becomes a valued part of their compensation package.

Written by Mike Ritzema

With over 20 years of experience in entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis, Mike has the breadth and depth of experience needed to quickly understand entrepreneurs’ businesses and craft the most suitable solutions.

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