Save Money by Paying Per Diem
You may be thinking, ‘how can I save money by paying per diem?’. And before we dive in to how per diem can benefit your trucking company, let’s review what it actually is.
Per Diem (Latin for ‘per day’ or ‘for each day’) or daily allowance is a specific amount of money that an organization gives an individual, typically an employee, per day to cover living expenses when traveling on the employer’s business. A per diem payment can cover part or all of the expenses incurred.
How Does Paying Per Diem Save Me Money?
Paying per diem as a substitute for wage puts more money in the driver’s paycheck, which helps with recruiting quality drivers, as well as retaining those drivers. If you want to read more about the other ways you can recruit and retain more drivers, check out our article here.
If we offset the reduced FICA match against the fact that per diem is only 80% deductible for income taxes*, then where is the money?
It is in workers’ compensation premium reduction. Generally, per diem paid to the IRS limit of $69 per day is not subject to workers’ compensation. Check with your insurance agent to be sure.
But how much will I save? We can show you by using this per diem calculator.
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Do you want to save that kind of money each year?
Please call us at 616-608-1800 or use the contact us page to reach out and learn more about per diem and trucking payroll.
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Written & Edited by Gentry DeWinter
Gentry graduated from Grand Valley with a Bachelor’s Degree in multi-media journalism. She is an artist who loves videography, writing, and hopes to one day own multiple dogs.