Per Diem & IRS Compliance

Over the years I’ve had the pleasure of speaking to hundreds of trucking companies. One of the first questions I ask them is “Do you pay per diem?” The replies I get on how they pay per diem are all over the board. Usually, they fall into three categories, per diem paid by the day, by miles, and by a percentage of pay. Two of these three can get you in trouble with the IRS! 

The IRS regulations on per diem clearly state that you may pay up to $69 per day for employees that travel in multiple meals and incidentals (M & I) markets. They also say that if you pay per diem another way, it cannot exceed that $69/day number. 

Example:

A driver is paid nine cents per mile per diem and the rest as wage. If they drive over 655 miles in a day, they are outside the IRS regulation and could be subject to extra government intervention.  A driver who is paid per diem as a percentage of their wage could have the same issue.

Another issue with paying per diem as a percentage or per mile is that you could lose out on the financial benefits of paying per diem.

This article explains per diem more in-depth and explains how to take advantage of the benefits of paying per diem.

We want to help you stay in compliance with IRS regulations and maximize your profitability. This is why Superior Trucking Payroll Service provides a no-cost assessment of your per diem practices. We will show you where you are out of compliance, and how to take advantage of the benefits of per diem.

Fill out the contact form below, or give us a call at (616) 608-1800 to set up your free assessment.