Melton truck parked in front of a river

How to Take Advantage of Per Diem Pay for Truck Drivers

For as long as truck drivers have been running the roads, they’ve had daily expenses to cover while they’re travelling. From food expenses and showers to additional supplies, there are always more incidental expenses just around the corner. However, these travel expenses that pop up throughout the workday have been considered by the IRS, making way for Per Diem programs that help offset the costs for eligible truck drivers.

What is Per Diem Pay?

Per Diem, meaning “by the day”, is a form of reimbursement in which a portion of a driver’s income is set aside as non-taxable as a way to ease the burden of out-of-pocket living expenses. As of January 2024, the current Per Diem rate confirmed by the IRS is set at $69 a day, though this figure changes year over year. Like with many programs, a trucker must hit a certain few markers before being eligible for per diem pay, such as:

  • Operating a heavy vehicle
  • Travelling more than 50 miles from home
  • Must be paid in a cents-per-mile pay structure

Drivers that are paid a daily rate, have an hourly pay rate, are in training, or run locally 50 miles or less from their homes, are not eligible for per diem pay. Private carriers may often set their own per diem rates that stay at the IRS level or above. This will depend on the position, region, and other factors determined at the company level. Additionally, those that are eligible for these programs may not elect to participate for any number of reasons.

How is Per Diem Pay Calculated?

Vehicles like straight trucks, dump trucks, and cement mixers usually require drivers to hold a Class B CDL to get started. The Class B CDL max weight limit is greater than 26,000 pounds without a trailer, or any vehicle towing a trailer that does not exceed 10,000 pounds. A Class B CDL is a bit more limited in its scope compared to a Class A, but still opens the door to a wide range of driving opportunities. Additionally, similar to a Class A, drivers holding a Class A can operate a Class C-type commercial vehicle as well.

Person doing math with a calculator

Can I Benefit from Per Diem Pay?

Whether or not this program is beneficial to you depends heavily on your financial situation and future financial goals. Trucking is a unique position, with many expenses that are eligible for deduction across the board, but it doesn’t consider a driver’s individual tax filing status or other dues they may have. It’s important to consider if you have deductions along the lines of a 401K plan or a company-sponsored savings plan that is based on taxable income, as contributions to those plans may be smaller after electing to join a per diem plan.

Another notable drawback of enrolling in a per diem plan is the reduction to taxable income on paper. When applying for a large purchase or for any kind of loan that is based on taxable income, one may not qualify for the amount they would have otherwise with a complete taxable income. When planning on making a big purchase (especially one that requires financing), be sure to consider if being enrolled in per-diem pay will affect this.

Additionally, based on filing status in certain states, a driver may find that they aren’t receiving back a tax refund aggregate to previous years, and in some cases, they may owe money. While this program can yield a great benefit for some, others may find it doesn’t make a huge difference in their paychecks. At Melton Truck Lines, we provide an online calculator that allows drivers to determine the difference in their yearly salary when opting into the per diem program, which can be found here:

Knowing now the benefits and drawbacks of per diem programs, it’s important for a truck driver to think about what is best for them and their family before opting in. At Melton Truck Lines, we allow for drivers to opt in after being hired and during our open enrollment periods, and they may opt out at any time if they determine the program doesn’t work for them and their long-term financial goals. Always reach out and speak with a payroll representative to determine if it might help you. Learn more about the other benefits Melton offers on our benefits page!

Sustainability in Trucking

Sustainability in Trucking  Even though heavy-duty vehicles make up just 5% of the vehicles on the road, they are responsible for over 25% of CO2 emissions. This doesn’t come as a surprise – large trucks need a lot of fuel to operate, and semitrucks transport...

Perks of Flatbed Hauling

Perks of Flatbed TruckingThere are several different types of trucking you can try out once you have your CDL, each with its own pros and cons to consider. One of the most popular types of trucking is flatbed, which differs from a standard dry van in that the trailer...

Women in the Truck Driving Industry

Women in the Truck Driving Industry  Nowadays, women in truck driving compose more of the workforce than ever before – but that number still sits between 8 and 10%. In the midst of the driver shortage that has worsened over the past few years, recruiting women...

Stay Organized as a Truck Driver

Stay Organized as a Truck Driver  Any OTR driver will tell you that the cab of a semi-truck wasn’t engineered to be spacious and luxurious. While drivers do have access to almost everything they’d need to be self-sufficient on the road, it has to all fit into a...