Per Diem for Trucking Companies

What is Per Diem for Trucking Companies and Why is it Helpful?

Have you ever thought about how a Per Diem program could benefit your trucking company?

At Superior Trucking Payroll Service, we often get asked, ‘What is Per Diem, and how can it benefit my company?‘ It’s surprising that so many companies miss out on the savings and other benefits that a Per Diem program can bring. The information provided in this guide is accurate as of August 20, 2024.

In this guide, we’ll explain what Per Diem is, how it works, and why it’s a smart choice for your trucking business. Whether you’re just learning about Per Diem or looking to improve your current program, we’ll show you how it can help both your company and your drivers.

How Per Diem is Defined for Truck Drivers

Per Diem, which means ‘per day’ in Latin, is a daily allowance given by a company to cover living expenses when an employee, like a truck driver, is traveling for work. For truck drivers, Per Diem is especially important because it helps pay for meals and other expenses while they’re on the road, not including lodging.

The IRS allows Per Diem payments that are equal to or less than the federal per diem rate to be tax-free. For truck drivers, this rate is up to $80 per day when they’re away from home. This means over-the-road drivers don’t get taxed on money that’s meant to cover their travel costs.

By using a Per Diem program, you can make sure your drivers are fairly compensated without increasing their taxable income, benefiting both the driver and the company.

A Success Story:

How One Trucking Company Saved Big with Per Diem

Let’s look at a hypothetical example of Big Wheels Transport, a trucking company that wasn’t using a Per Diem program. They didn’t know they were missing out on big savings.

Before starting Per Diem, they paid drivers full wages, which meant higher taxes and more money spent on workers’ compensation. After working with Superior Trucking Payroll Service to set up Per Diem, Big Wheels Transport started saving a lot. They cut their taxable wages by $500,000 each year, saving about $38,250 in payroll taxes. Plus, their workers’ compensation costs dropped by 15%, saving them another $25,000.

In total, Big Wheels Transport saved $63,250 a year. They used this money to grow their business and keep their drivers happy. While this is a hypothetical story, it’s typical of the real-life savings trucking companies experience with a good Per Diem program.

Managing Trucking Payroll and Per Diem with Superior Trucking Payroll Service?

At Superior Trucking Payroll Service, we know how important it is to offer flexible and effective solutions for structuring Per Diem payments. Our goal is to provide trucking companies with options that not only comply with IRS regulations but also optimize driver compensation and satisfaction.

Per Diem payments can be structured in several ways:

Each of these methods offers flexibility, allowing companies to choose the one that best fits their business. However, it is crucial to ensure that these payments follow IRS guidelines to avoid tax issues for both the company and the drivers.

By partnering with Superior Trucking Payroll Service, you’ll have access to expert guidance on structuring your Per Diem program. We can help you navigate the complexities of IRS compliance, ensuring your program is both beneficial and legally sound.