How do I convince a truck driver that per diem is good for them?
In other articles, we have talked about the benefits of per diem to both the trucking company and the truck driver. So we know paying per diem to the truck driver is a win for the driver. But, how do we convince the driver that paying per diem gets them more money?
The easiest thing to do is show the driver two pay stubs.
One of them has per diem and one does not. Then ask them which check they would like to take home. As the pay stub with per diem will be about $80 to $100 more, I think they will pick that one.
Another important issue
may be that the truck driver learns that by being paid per diem, that their social security check will be smaller as their wages on which social security tax is calculates is lower. That is true. I would suggest that the driver take ½ of the extra money and invest it in a retirement account to cover any lesser amount of social security benefit. They will likely be much better off financially (Disclaimer: consult your financial advisor on this).
Other drivers may need convincing
because the lower wage on their taxes makes it harder to get financing for a new home or car. Many lending institutions will understand how per diem works if the employer sends a letter explain it to the lender. Also, maxing out your credit may not be the best financial strategy but to each his or her own.
If you would like a copy of a sample letter for the bank or need pay stub examples like the ones I mentioned above, contact us at the bottom of the page.
Written by Mike Ritzema
With over 20 years of experience in entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis, Mike has the breadth and depth of experience needed to quickly understand entrepreneurs’ businesses and craft the most suitable solutions.
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