*** article updated 2/28/2025 ***
Are you a truck driver trying to figure out how to make the most of your paycheck? Have you ever wondered why some drivers take per diem pay while others avoid it?
The truth is, per diem pay can either put more money in your pocket or hurt your financial future—depending on how you use it.
In this article, we’ll break down exactly how per diem works, who benefits the most, and whether it’s the right choice for you.
Per Diem Explained: How It Works for Truckers
Per diem (which means “per day” in Latin) is a daily meal allowance that trucking companies give drivers while they are working away from home. The purpose of per diem is to help truckers pay for their own meals and small expenses without being taxed on that money.
The IRS allows this tax-free benefit because truck drivers often spend long hours away from home and must pay for meals on the road. Instead of making drivers keep receipts for every meal, the IRS sets a standard daily per diem rate.
How Much Per Diem Can You Get? (Updated 2024 Rates)
As of October 1, 2024, the IRS per diem rates for truck drivers are:
- $80 per day for travel in the continental U.S.
- $86 per day for travel outside the continental U.S. (Alaska, Hawaii, and international trips).
These rates are tax-free, meaning they reduce the amount of your income that is taxed—which can be a big benefit!
How Per Diem Pay Works for Truckers
Per Diem for W-2 Truck Drivers: What You Need to Know
As of January 1, 2018, due to the Tax Cuts and Jobs Act (TCJA), company-employed truck drivers can no longer claim unreimbursed business expenses, including per diem, as a tax deduction on their personal tax returns. This suspension is effective through 2025.
Therefore, the only way for W-2 drivers to benefit from per diem is through a per diem program offered by their employer. In this arrangement, the employer provides a daily, non-taxable allowance to cover meals and incidental expenses incurred while traveling away from home. This allowance is excluded from taxable income, resulting in higher take-home pay.
How Owner-Operators Can Deduct Per Diem on Taxes
Owner-operators, being self-employed, can deduct per diem expenses on their tax returns. They can claim a set per diem rate for each day they are away from home for business purposes, covering meals and incidental expenses.
The Pros and Cons of Per Diem: Is It Worth It?
Per diem can be a great way for truck drivers to keep more of their hard-earned money, but it’s not always the best choice for everyone. Before deciding whether to take per diem pay, it’s important to weigh the benefits and drawbacks so you can make the best financial decision for your situation.
The Biggest Benefits of Per Diem Pay
- More Take-Home Pay: Since per diem isn’t taxed, your paychecks will be bigger than if you were taxed on the full amount.
- Covers Daily Expenses: Instead of paying for meals out-of-pocket, you get an upfront allowance to cover your costs.
- Lowers Your Taxable Income: Since per diem reduces your reported income, you may qualify for more financial aid (like student loans or public assistance).
- Easier Money Management: Per diem gives you a set budget for meals, making it easier to manage your money on the road.
The Hidden Downsides of Per Diem Pay
- Lower Social Security & Medicare Contributions: Since per diem lowers your taxable income, you may receive less Social Security when you retire.
- Harder to Get Loans & Mortgages: Many banks look at taxable income when approving loans. Since per diem lowers your reported income, it might be harder to qualify.
- Less Unemployment & Disability Pay: These benefits are based on your taxable earnings. Since per diem lowers that amount, you could receive less money if you lose your job.
- No 401(k) Contributions on Per Diem: If your company offers a 401(k), per diem earnings do not count toward your retirement contributions.
Now that you understand the pros and cons of per diem let’s break down how it actually affects your paycheck. By looking at a simple calculation, you’ll see exactly how per diem pay works and what it means for your take-home income.
Per Diem Pay Calculation: How Much Will You Take Home?
Let’s say your gross pay is $1,000, and you receive $200 in per diem.
- Before Per Diem: Your full $1,000 would be taxed.
- With Per Diem: Only $800 is taxed; the $200 per diem is not taxed and given to you as a reimbursement.
That means:
- You pay fewer taxes on your paycheck.
- You get the $200 per diem amount tax-free.
- Your take-home pay is higher than if the full amount was taxed.
Now, let’s see what per diem does for the trucking company.
Why Trucking Companies Offer Per Diem (And How It Helps You)
Why do companies offer per diem? It benefits both the employer and the driver.
- How Companies Benefit from Per Diem:
- They save money on payroll taxes.
- They reduce their costs while keeping driver pay competitive.
- Why Per Diem Can Put More Money in Drivers Pocket:
- They get tax-free money upfront instead of waiting for tax season.
- They take home more money in each paycheck.
Some companies require drivers to take per diem, while others make it optional. Be sure to ask before signing a contract!
Per Diem: The Smartest Financial Move or a Mistake?
If you’re a truck driver, understanding per diem pay is crucial—it can save you money now but may affect your long-term financial future.
You originally came here to figure out whether per diem is the right choice for you. Now, you know the advantages, disadvantages, and tax implications.
Your next step is to use the Per Diem Saving Calculator to see how it affects your paycheck. You can also check out “Why Per Diem is Good for Trucking Companies” to learn how different employers handle per diem programs.
At Superior Trucking Payroll Service, we help trucking companies manage per diem programs the right way—ensuring compliance while maximizing savings for drivers. Contact us today to optimize your payroll system!
Let us handle your trucking payroll so you can focus on running your business.
Contact us today to get started!
Written by Melisa Bush
With over 15 years of experience in the trucking industry, Melisa is well-versed in the complexities of trucking payroll and adept at navigating special circumstances. Before joining Superior Trucking Payroll Service, Melisa worked at a trucking company, where she managed driver miles and expenses for a fleet of 50 trucks. This hands-on experience gives her unique insight into the challenges our clients face when preparing their payroll data.
Melisa’s top priority is customer service. She strives to treat each client as an individual with genuine needs, rather than just another number in the system. Her goal is to alleviate the burdens of our clients and make their daily operations smoother.