Employee Driver Per Diem Survey

Instructions

The Owner Operator Independent Drivers Association is requesting input from employee drivers regarding motor carrier employers paying a per diem (daily expense allowance) in place of a portion of driver compensation. The Internal Revenue Service issued a new Revenue Ruling in November of 2006 that could negatively affect the practice in the industry. If it is discovered during an audit that the method of calculating the per diem does not fall within the guidelines and/or is not properly substantiated the entire amount could be classified as wages and be subject to payroll taxes.

In general, a per diem is an allowance for certain business related expenses incurred while traveling. The allowable portion of a per diem for a typical trucker is limited to meals and incidental expenses. A simplified method can be used that currently allows $58 for high-cost areas and $45 for low-cost areas, but it is common in trucking, where trips regularly take you in and out of those areas, to instead allow an average of $52.

The upside for drivers is, the per diem is considered a business expense reimbursement instead of wages and is therefore not subject to income taxes, including Social Security taxes. The downside is, taxable Social Security wages are reduced resulting in a lower benefit being paid when eligible.

If the company you drive for pays a per diem in lieu of a portion of your compensation, please answer the following questions:

Company information