Per Diems

Important: We're not a CPA, not a lawyer, nor an expert on these matters — please consult your own professional advisors and do not rely solely on the information we're providing below.

Background reading

Here are some articles which explain the ins and outs of per diems for the trucking space:

• Trucker per diem rules, simply explained (PerDiemPlus) — we're not recommending PerDiemPlus, but they have a good article explaining the rules.
• Truck driver per diem tax break (Non-Forced Dispatch) — explains it in slightly different terms.
• Ending the confusion over per diem (FreightWaves) — explains the 2018 changes which caused a lot of the confusion in the trucking space.

As we understand it, in the past company drivers could retroactively take the per diem deduction when they calculated their personal taxes, but the rule change made that a no-no. However, the rules DID allow the company to deduct the per diem up front at the time of paying drivers. Many people mistakenly thought per diems had been abolished when they heard drivers couldn't do it on their own taxes after the fact.

How per diems work in Haldi Tech

Essentially, the per diem approach is to reclassify a portion of a driver's pay from "cpm pay" to "daily per diem reimbursement."

As an example, imagine a driver who has driven 2,000 miles and whose cpm rate is $0.70/mile, so his pay would be $1,400 for the week. Since the driver is a team driver and was away from home for 5 nights, he is eligible for 5 days of per diem at $66/day (2021 rate = $66/day; 2022 rate = $69/day). So according to the IRS, $330 of his pay is eligible to be classified as per diem reimbursement.

In our system we create a per diem entry with a total amount of $0, which deducts $330 from the taxable portion of his pay and adds $330 to the non-taxable portion of his pay. The net result is that his taxable pay becomes $1,070 in this example and his non-taxable portion is $330, while his total gross pay remains $1,400. This results in lower income taxes to the driver, along with a lower SS/Medicare tax amount to both the driver and the company.

Your compliance responsibility

What we cannot guarantee compliance on is that you, as the employer, are responsible for making sure you're correctly accounting for the number of days for which the driver is eligible for per diem each week. We provide a screen (Days Worked) on the payroll which shows the number of miles dispatched each day of the week and attempts to auto-calculate this for you based on rules we've written (and which you can change). At the end of the day you have the ability to override the number we guessed for the actual number of days worked (i.e. days of per diem) and enter whatever number you like there. In that sense, we can't guarantee that you won't get your hand slapped by the IRS if you enter a bogus number of days worked into the system.