Per Diem FAQ

Prefer to learn through a video? Check out this short video that hits everything you need to know about Melton’s per diem program. 


What is per diem?

Per diem pay is a way for a portion of driver pay to be tax-free.

Why is Melton offering a per diem plan, and what is the benefit to me?

There were changes to the tax law and drivers can no longer deduct certain expenses on their federal tax return. Melton is offering this per diem plan as a way for drivers who choose to participate in the plan to offset expenses due to working many nights away from home.

Is the per diem plan optional?

Yes. In order to participate in the plan, you will need to complete a form to opt in to the plan. This form will be provided to drivers prior to the enrollment period for the plan in the month of July.

Do I have to keep records if I am paid in per diem?

Please consult your tax professional regarding record keeping requirements.

Can I do this on my own tax returns instead?

As of January 1st, 2018, drivers may no longer deduct per diem on their own federal tax return.

How will per diem impact my taxes?

Please consult your tax professional regarding record keeping requirements.
As an example, your federal and state taxes will be lower because per diem pay is a reimbursement for meal expenses, not taxable income. Your tax refund(s) may go down because you will have less withheld from each paycheck. To understand in detail how you will be affected if you chose to participate in the plan, you should consult a tax professional of your choice.

Why is there an administrative cost?

The administrative cost is to assure IRS compliance. Drivers will be assessed a small fee (approximately $2.00 per week) for the administration of the plan.

Does getting paid in per diem affect my ability to get a loan?

Loan companies often request W2’s to verify your earning capacity. The impact of opting in a per diem plan is to intentionally reduce the gross wage that you are taxed as reflected in your W2. As part of your loan process, you may need to provide additional tax documents to show your actual earning capacity.

Is there a limit to what I can get paid in per diem?

Yes. Per diem is paid as a rate per mile and is limited by the IRS.

Can I still file an itemized federal tax return?

You may be able to itemize on your tax return, but you should consult a tax professional to determine what is best for your specific situation.

How will I enroll?

Drivers will be provided with additional information and a form to opt in during the month of July. Future elections periods will happen around the annual open enrollment period for benefits.