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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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i own a small over the road trucking co. the drivers are able

Resolved Question:

i own a small over the road trucking co. the drivers are able to claim a per diem as a deduction on their taxes of about $60.00 per day that they are away from home. my question is this if i pay them $ 60.00 a day per diem and $ 60.00 a day pay , for a total of $ 120.00 a day can i treat the per deim pay as untaxable ( reembuesment) and avoid paying the employer portion of social security tax on it and not count it into my workers comp . also the state unemployment tax. i have had 2 acountants tell me that i can do that , but i would like some guidance on what sec. of the tax code i could find the info. and your interpetation. thanks rick poulos
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello JA Customer,


Per diem is an allowance paid to your employees for lodging, meals, and incidental expenses incurred when traveling. This allowance is in lieu of paying their actual travel expenses.

Per diem payments are not part of the employee's wages if the payment is equal to or less than the federal per diem rate and the employer receives an expense report from the employee.

The report must include:

  • The business purpose of the trip,
  • The date and place of the trip, and
  • Receipts for lodging

The employee must file the expense report with the employer within a reasonable period of time (60 days). If any of these requirements are not met, the payment is taxable to the employee.


The above link is to a publication put out by the IRS which answers in more detail questions that you may have on paying your employees a per diem allowance, including the taxability of these payments.



Thank you JA Customer





Customer: replied 7 years ago.
i think these drivers fall under the surface transportation act . it is difrent than the standert link to the irs sec. that you sent . i do not think they need any recites , just their log books showing that they were away from home . please direct me to that section so i can know that i can avoid the 25 % or so on the roughly $ 60.00 per day. thank you
Expert:  Merlo replied 7 years ago.

Hello again Customer,


I know of no exception for truck drivers or anyone else to not have to submit the required reports. I will put your question back on the open board to see if someone else here is familiar with such an exception.


You will receive an email notification if someone else posts a response.


Thank you for your patience.


Customer: replied 7 years ago.
good deal, just to be sure and clerify . if i pay my drivers a per diem rate at or below the fedral alowable rate of per diem ,( i belive it is $ 58.00 per day) i am not responsable to figure it as payroll , thus i am not responsable to pay employer social security tax , state unemployment tax, or worker comp , on the daliy per diem that i give to my drivers. PLEASE let me know that i have interpupeted this corectly, if i have this is the best $ 30.00 i have ever spent . thank you
Expert:  Merlo replied 7 years ago.

Hello again Customer,


Your understanding is correct. As long as you pay them at or below the federal per diem rate, then you do not need to include the amount in their taxable wages, and therefore you pay no FICA taxes, unemployment or workers comp on the amount paid.


What you may be thinking of is a special rule which applies to transportation workers as far as the per diem rate which is used for meals and incidental expenses. Workers who are in the transportation industry may elect to use a special flat meals and incidental expense rate rather than having to apply rates on a locality basis. The flat rate which can be applied per day to cover meals and incidental expenses for a transportation worker is currently $65 per day. They must still submit a report to you which shows the date and place of the trip, business purpose of the trip, and receipts for lodging if that applies. Receipts for the meals are not required if using the per diem meal rates. So as long as you are paying them $65 per day or less, the log sheets is all that would be required.



Thank you Customer



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Customer: replied 7 years ago.
merlo you are the greatest i will push the pay you button as soon as i thank you if you do not get payment it may be because that screen deleates when i reply just resend to me and i will hit payment then thank you so much for your extra efferts if you know how to let the site know how pleased i am just send me the link thank you again . have a good 4th of july .
Expert:  Merlo replied 7 years ago.

Hello again Customer,


I have no way of resubmitting a payment request to you. That is all handled by the administrators of this site. You should just be able to click on the Accept button below and that will allow me to receive credit for helping with this question which will be appreciated.


Thank you again Customer and have a good holiday weekend, or at least what's left of it.