Per Diem for Truck Drivers: What It Is & How It Works

updated 3/4/2025

Are you a truck driver trying to figure out how to make the most of your paycheck? Have you ever wondered why some drivers take per diem pay while others avoid it?

The truth is, per diem pay can either put more money in your pocket or hurt your financial future—depending on how you use it.

In this article, we’ll break down exactly how per diem works, who benefits the most, and whether it’s the right choice for you.

Per Diem Explained: How It Works for Truckers

Per diem (which means “per day” in Latin) is a daily meal allowance that trucking companies give drivers while they are working away from home. The purpose of per diem is to help truckers pay for their own meals and small expenses without being taxed on that money.

The IRS allows this tax-free benefit because truck drivers often spend long hours away from home and must pay for meals on the road. Instead of making drivers keep receipts for every meal, the IRS sets a standard daily per diem rate.

How Much Per Diem Can You Get? (Updated 2024 Rates)

As of October 1, 2024, the IRS per diem rates for truck drivers are:

$80 per day for travel in the continental U.S.

$86 per day for travel outside the continental U.S. (Alaska, Hawaii, and international trips).

These rates are tax-free, meaning they reduce the amount of your income that is taxed—which can be a big benefit!

How Per Diem Pay Works for Truckers

Per Diem for W-2 Truck Drivers: What You Need to Know

As of January 1, 2018, due to the Tax Cuts and Jobs Act (TCJA), company-employed truck drivers can no longer claim unreimbursed business expenses, including per diem, as a tax deduction on their personal tax returns. This suspension is effective through 2025.

Therefore, the only way for W-2 drivers to benefit from per diem is through a per diem program offered by their employer. In this arrangement, the employer provides a daily, non-taxable allowance to cover meals and incidental expenses incurred while traveling away from home. This allowance is excluded from taxable income, resulting in higher take-home pay.

How Owner-Operators Can Deduct Per Diem on Taxes

Owner-operators, being self-employed, can deduct per diem expenses on their tax returns. They can claim a set per diem rate for each day they are away from home for business purposes, covering meals and incidental expenses.

How Per Diem Pay Works for Truckers

Per diem can be a great way for truck drivers to keep more of their hard-earned money, but it’s not always the best choice for everyone. Before deciding whether to take per diem pay, it’s important to weigh the benefits and drawbacks so you can make the best financial decision for your situation.

The Biggest Benefits of Per Diem Pay

More Take-Home Pay: Since per diem isn’t taxed, your paychecks will be bigger than if you were taxed on the full amount.

Covers Daily Expenses: Instead of paying for meals out-of-pocket, you get an upfront allowance to cover your costs.

Lowers Your Taxable Income: Since per diem reduces your reported income, you may qualify for more financial aid (like student loans or public assistance).

Easier Money Management: Per diem gives you a set budget for meals, making it easier to manage your money on the road.

The Hidden Downsides of Per Diem Pay

Lower Social Security & Medicare Contributions: Since per diem lowers your taxable income, you may receive less Social Security when you retire.

Harder to Get Loans & Mortgages: Many banks look at taxable income when approving loans. Since per diem lowers your reported income, it might be harder to qualify.

Less Unemployment & Disability Pay: These benefits are based on your taxable earnings. Since per diem lowers that amount, you could receive less money if you lose your job.

No 401(k) Contributions on Per Diem: If your company offers a 401(k), per diem earnings do not count toward your retirement contributions.

Now that you understand the pros and cons of per diem let’s break down how it actually affects your paycheck. By looking at a simple calculation, you’ll see exactly how per diem pay works and what it means for your take-home income.

Per Diem Pay Calculation: How Much Will You Take Home?

Let’s say your gross pay is $1,000, and you receive $200 in per diem.

Before Per Diem: Your full $1,000 would be taxed.

With Per Diem: Only $800 is taxed; the $200 per diem is not taxed and given to you as a reimbursement.

That means:

You pay fewer taxes on your paycheck.

You get the $200 per diem amount tax-free.

Your take-home pay is higher than if the full amount was taxed.

Now, let’s see what per diem does for the trucking company.

Why Trucking Companies Offer Per Diem (And How It Helps You)

Why do companies offer per diem? It benefits both the employer and the driver.

How Companies Benefit from Per Diem:

They save money on payroll taxes.

They reduce their costs while keeping driver pay competitive.

Why Per Diem Can Put More Money in Drivers Pocket:

They get tax-free money upfront instead of waiting for tax season.

They take home more money in each paycheck.

Some companies require drivers to take per diem, while others make it optional. Be sure to ask before signing a contract!

Per Diem: The Smartest Financial Move or a Mistake?

If you’re a truck driver, understanding per diem pay is crucial—it can save you money now but may affect your long-term financial future.

You originally came here to figure out whether per diem is the right choice for you. Now, you know the advantages, disadvantages, and tax implications.

Your next step is to use the Per Diem Saving Calculator to see how it affects your paycheck. You can also check out “Why Per Diem is Good for Trucking Companies” to learn how different employers handle per diem programs.

At Superior Trucking Payroll Service, we help trucking companies manage per diem programs the right way—ensuring compliance while maximizing savings for drivers. Contact us today to optimize your payroll system!

Per Diem Savings Calvulator

How Per Diem Saves Trucking Companies Thousands

Written by Calvin Cuba

Calvin is a Client Solutions Specialist at Superior Trucking Payroll Service who works closely with trucking companies to understand their payroll challenges and explain their options clearly. His focus is on education, honesty, and helping companies make confident decisions about payroll—even when there’s no sales pressure involved.