I forgot what the tax consequences are when a company pays your .40cpm and .10cpm of that is per diem. If I remember right it hurts your social security.

Hurts meal deductions at tax time also. Instead of getting a nice sum back at tax time you are getting it a bit at a time throughout the year. Companies pay less tax this way I'm told. I think it's a way companies that don't pay very well use to make your check look like you're earning more than you actually are. I don't care for it at all but don't have an option until I can get better employment somewhere.

Because your per diem is a pre tax deduction large carriers use it to skate by without having to pay as much unemployment,social security , and less to 401k contributions. It pinches pennies for the carrier but cuts into your income .If you are married with kids the perdiem helps you zero.It can make your check look bigger if you take no exemptions on your withholding .If you really want to make your check look bigger adjust your exemptions so they remove less taxes from your check because in the end you really are getting paid less at the end of the year. If you deduct your meals and expenses you will make more unless your comapny actually pays a real perdiem .

The scam I encountered when I first started driving was like this Solo pay for a new driver was $0.25 a mile. Under the per diem it was $0.19 a mile with .04 cpm going to perdiem they were cheating the driver .01 cpm . So what that meant was if you ran 2000 miles a week they kept 20 bucks per week and paid less in Employer contributions to SSI and such. While a single persons's check take home may look a little better becuase of the lower tax bracket. You actually are making less because you cannot clam any expenses at the end of the year . Just think what that 20 bucks a week looks like to a company with 4000 drivers taking perdiem thats $4,160,000 then add to that how much they saved on contributions a pre tax perdiem is all about the company its a loophole in the tax code that helps them a whole lot more than you .

Just because the company pays you a per diem rate doesn't mean you don't get to claim the per diem. BUT!!! you must deduct the per diem that you did get paid from them from the $52 a day.

Example: The company paid you for 1,000 miles of per diem at say $0.10 a mile and you were on the road 150 days @ $52.00 a day. The per diem they paid would be $100 and the amount of per diem you would have been entitled to would have been $7,800 you have to deduct the $100 from the $7,800 leaving you able to claim 80% of the remaining $7,700.

Linda