Understanding Per Diem Pay in the Trucking Industry

As a truck driver or student looking to get a commercial driver’s license, or CDL, understanding per diem pay is crucial. It’ll help you maximize your tax benefits, save money, and improve your finances long-term. Here’s what you need to know.

What Is Per Diem Pay?  

Per diem is Latin for per day, and it refers to a daily allowance for expenses you can be reimbursed for. There are regulations around what can be included, but some common costs include meals and incidental expenses. When reading about per diem pay, keep in mind that many of the regulations were changed in the 2017 Tax Cuts and Jobs Act. For example, the laws outline a new revenue procedure that allows taxpayers to substantiate actual allowable expenses as long as they have records to prove the deductions.

How Does Per Diem Pay Work?

If a trucking company has a per diem allowance, you’ll generally pay for meals or lodging, and they’ll reimburse you in the next paycheck. Since you covered these costs originally, the money given to you by your employer for these specific expenses is considered non-taxable income. As a result, your adjusted gross income will appear lower for tax purposes, allowing you to collect a larger refund.

How Can You Qualify?

Truck drivers need to meet certain conditions to avoid undue taxes on per diem pay. For example, there is a maximum allowance that you can’t exceed. If you spend more than $63 in a day, the amount that surpasses the allowance will be taxed.

Additionally, you need a residential address, and you have to be away from the home for longer periods than a regular workday. For example, if you drive all day but sleep at your house every night, you won’t qualify for per diem pay. Finally, keep track and submit pay receipts for relevant expenses, like meals. Credit card bills will also work.   

If you’re looking to become a truck driver, contact Hamrick School. Serving Akron and Clevaland, OH, our CDL programs will help you begin a lucrative career and improve your financial future. Call (330) 239-2229 to learn about our class schedule.

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