PDP For Fleets - 3 Months Free

May 30, 2016

Which Per Diem Method Benefits a Driver the Most, Cent Per Mile or Daily Rate?

Mark Sullivan- Per Diem Plus
Mark W. Sullivan, EA
Mark is our transportation industry expert and has over a decade of experience advising clients on IRS accountable per diem programs. 

An employee truck driver asked the following question to the Per Diem Plus tax experts during the 2016 Mid­America Truck Show: "Is cent per mile or IRS daily rate per diem better for a driver?"

The cent ­per ­mile per diem method has been the transportation industry standard for decades and is most often utilized by fleets who offer employee drivers company­ paid per diem.  Under the cent­ per­ mile method a driver is paid only for miles driven and not nights away from home.

Although, a driver may travel 500 miles one day but only 250 miles the next, the distance traveled does not affect the need to eat three meals a day.  To remedy this problem the IRS introduced the Special Transportation Industry* daily rate per diem that ignores miles traveled and relies on days away from home.  The most beneficial aspect to a driver is that per diem can be claimed during a 34 hour restart and unforeseen delays like breakdowns, waiting for permits or weather.

The table below illustrates the advantage of choosing daily rate per diem:

Per Diem versus Cent Per Mile Table

This article was written by D R Sullivan & Company, CPA PC, an accounting firm that has been providing taxpayer advocacy, consulting, and litigation services since 1998.  The firm has nearly a decade of experience advising large fleets and telematics providers on IRS substantiated per diem and is tax counsel for Per Diem Plus, an automated per diem and expense tracking Android app.

Please remember that everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice.  Please consult your own tax or accounting professional.

Copyright 2016 Per Diem Plus, LLC.  The Per Diem Plus logo and Per Diem Plus are trademarks of Per Diem Plus, LLC.

Proud to be American - Per Diem Plus
Proud To Be American
100% developed, owned, and managed in the great USA!
Follow Us
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram