What is per diem for truck drivers and how it works in 2023

Per diem is a great option for truck drivers who mostly spend long driving distances; let’s know about per diem for truck drivers in 2022 and how per diem works

Whether you’re already a truck driver or looking for truck driving jobs, you must have seen or heard about “Per Diem.” And this per diem system is beneficial for both the truck drivers and their employers. 

If you’re landing a job where they offer per diem opportunity, and you’re confused regarding making a decision, we’ve got it covered. In this article, you’ll learn what per diem for truck drivers in 2022, how it works, pros and cons of it. 

What Is Per Diem For Truck Drivers?

Per diem means “Each Day” or “Daily.” Per diem is a certain amount given by the trucking companies to the truck drivers when they need to stay on the road; per diem covers various daily travel expenditures.

So you don’t need to worry about how you’ll manage finance while being on the road.

What Expenses Do Per Diem Covers?

Per diem for truck drivers especially covers three types of expenditures. And these three are the most common. Let’s see what the expenses are that fall under the umbrella of per diem. 

• Lodge

Truck drivers get lodge expenses from their employers when they are required to spend their night hauling freights; lodge expense is for staying in a hotel or motel overnight.  

• Meal

You’ll get your meal cost included with your per diem pay. 

• Incidental

Per diem also covers all kinds of incidental costs. Incidental cost is spending that is minimal such as laundry, gratuities, and other fees. 

What Is The Per Diem Amount For Truck Drivers In 2022?

Per diem for truck drivers has been through several revisions in 2017. The per diem for truck drivers was $63 per day/night(based on duty schedule), and from October 1, 2021, to September 30, 2022, the per diem (Meals & Incidental Expense)for truck drivers is set to be $69 per day/night.

And if the truck driver needs to travel outside the continental United States (also known as OCONUS), they will get per diem (Meals & Incidental Expense) of $74/day, which is an increment from $71/day. 

Remember that this per diem is effective until September 30, 2022; after that, The General Services Administration (GSA) is likely to revise it once again for the 2023-2024 fiscal year. 

How does Per Diem For Truck Drivers Work?

The per diem method varies from company to company; for instance, some employers give per diem to their truck drivers when they travel, whereas others give per diem when the truck drivers get back from their hauling. 

Advantages Of Per Diem For Truck Drivers And Employers

Per diem is such a program that helps both the truck drivers and their employers. How? Let’s find out the advantages of per diem below

Per diem Pros For Truck Drivers

• Tax-Free

The amount you take as per diem is 100% tax-free! That means the per diem you get from your employer(s) is not taxable, and the per diem amount will be removed from your annual income. 

• Eligibility For Assistance and loans

As per diem lowers your annual income, though it’s a disadvantage in a particular way, it also brings other opportunities like you’ll increase the eligibility for public Assistance and other loan programs. 

• Get Paid Immediately

If your employer doesn’t pay you before you travel, you’ll get paid immediately right after you are done with your assigned task. 

Per diem Pros For Employers

• Less Annual Tax

The primary reason companies give per diem is that it helps them give less annual tax to the government for operating their business by taking the advantages of per diem.  

• Better Finance Tracking 

Per diem helps companies and owner-operator truck drivers track their finances soundly because It cuts down the usage of a lot of paperwork and documentation. 

• Disadvantage Of Per Diem For Truck Driver

The per diem system is also accountable for a few cons, some of which are;

• Not Getting a Mortgage and other financial support

Because of per diem, though, you’ll earn the same as other truck drivers who aren’t taking per diem, but your yearly income will be lower than others. And you may get Assistance and other benefits, but you’ll miss out on crucial services like mortgages due to a lower credit score. 

• Spending Too Much 

Due to the per diem facility, many truck drivers tend to spend much more than their per diem balance, which is subtracted later by the company.

Is There Any Limit For Per Diem?

Yes, there’s a limit of per diem, until which the money you’ll get won’t be counted As taxable, and when you cross the limit, you’ll have to pay tax for the exceeded amount.

To know more about the per diem limit, contact your employer or visit the Internal Revenue Service.  

Is Every Industry Eligible For the Per Diem program?

You’ve to work in the industries that are qualified for tax-free per diem programs because many companies also give per diem, but you won’t enjoy the benefit there; per diem is available mostly in the transportation industry. 

Conditions that should be met for the per diem program

• You’re working in the transportation industry

To be eligible for per diem, you’ve to work in the transportation industry, although it’s not always mandatory; if your job requires you to stay out of your town or home for at least a day or more, then you may get per diem. 

• Report Of Your Expenses

When you’re on the road, you must have to keep records of the expenses, comprising the date, time and reason for travel. If you don’t do it, the IRS won’t give you the tax-free benefit.

Collecting the receipt of your purchase or spending while on the road is the simplest way to maintain records.

Overall, there are both positive and negative opinions regarding per diem among truck drivers, some truck drivers are partisan of the per diem system, and some don’t opt in for it. If you think you can manage your finances well and benefit from it in the long run, per diem is a perfect opportunity.