What Is Truck Driver Per Diem & How Does It Work?

Truck drivers frequently incur expenses while on the road. Per diem, a Latin term meaning “by the day,” provides a daily allowance for certain business-related expenses. This allowance is distinct from a driver’s regular wages and serves as a reimbursement for costs incurred when traveling away from home overnight. It simplifies expense tracking for both drivers and their employers, acknowledging that drivers are often away from their primary residence for extended periods.

Understanding Truck Driver Per Diem

Per diem for truck drivers is a standard daily allowance covering meals and incidental expenses (M&IE) when they are on the road and away from their tax home overnight. A driver’s tax home is generally the entire city or general area where their main place of business or work is located, not necessarily their family residence. This allowance simplifies accounting for daily out-of-pocket costs, eliminating the need for drivers to retain every receipt for meals and minor expenses. The system acknowledges that truck drivers face consistent daily costs for food and other incidentals while performing duties away from home. The Internal Revenue Service (IRS) establishes and annually updates these per diem rates, ensuring consistency and fairness in reimbursements and deductions. Per diem primarily focuses on variable daily costs like eating and minor necessities, as lodging expenses typically require actual receipts.

How Truck Driver Per Diem Works

Per diem rates for the transportation industry are determined by the IRS and updated annually, typically effective October 1st. For fiscal year 2025, the special M&IE rate for transportation industry workers is $80 per day for travel within the continental United States (CONUS) and $86 for travel outside the continental United States (OCONUS). These rates cover meals and incidental expenses, with a small portion, such as $5, allocated specifically for incidental costs.

Per diem is paid when a driver is away from their tax home for a period requiring them to obtain sleep or rest. This “away from home overnight” rule is a fundamental condition for per diem eligibility, meaning a duration that necessitates rest away from home, not necessarily a full 24-hour period. For employed drivers, per diem is often paid as part of their compensation or as a non-taxable reimbursement by their employer. Self-employed drivers, such as owner-operators, can deduct these expenses on their tax returns. For partial travel days, such as the day of departure or return, a partial per diem allowance, typically 75% of the full daily rate, can be claimed.

Proper substantiation is necessary for per diem claims, even without individual receipts for meals and incidentals. Drivers must maintain a logbook or other records, such as electronic logging device (ELD) backups, documenting the time, date, and location of their travel. These records validate that the driver was away from their tax home and subject to Department of Transportation (DOT) hours of service limits, a requirement for per diem eligibility.

Tax Considerations for Truck Driver Per Diem

The tax treatment of per diem payments differs depending on whether a truck driver is an employee or self-employed. For employed drivers, qualified per diem payments received from their employer under an accountable plan are generally non-taxable reimbursements. This means the per diem amount is not included in their taxable wages reported on their W-2 form, which can result in a lower adjusted gross income and potentially a reduced tax liability. If employer-paid per diem exceeds IRS-allowed rates or the arrangement does not meet accountable plan rules, the excess or entire amount may become taxable income. An accountable plan requires business connection, expense substantiation, and the return of any excess reimbursements.

Self-employed truck drivers cannot receive non-taxable per diem payments from an employer but can deduct these expenses on their tax returns, typically on Schedule C (Profit or Loss from Business). For 2025, self-employed transportation workers can deduct 80% of the IRS-allowed per diem rate for meals and incidental expenses. This percentage can change. Employee truck drivers can no longer claim the per diem deduction as an itemized deduction on their federal income tax returns. This change primarily impacts company drivers not reimbursed by their employers or those whose employers do not use an accountable plan. The ability to deduct per diem for meals and incidental expenses is now largely limited to self-employed drivers subject to DOT hours of service regulations.

Deciding Between Per Diem and Actual Expenses

Truck drivers, particularly self-employed individuals, choose between deducting the IRS-provided per diem allowance or their actual meal and incidental expenses. The per diem method offers simplicity, eliminating the need for detailed receipts for every meal and incidental expense. This significantly reduces the record-keeping burden, requiring only a log of travel dates, times, and locations.

Deducting actual expenses might be advantageous if a driver’s legitimate meal and incidental costs consistently exceed the IRS per diem rates. This could lead to a higher deduction, potentially reducing taxable income further. However, opting for actual expenses necessitates meticulous record-keeping, including saving every receipt for meals, tips, and other minor costs.

When making this decision, a driver should consider their typical spending habits while on the road. If daily meal and incidental expenses are below or around the per diem rate, the simplicity of the per diem method is often preferred. If actual expenses frequently surpass the per diem, tracking every receipt might be worthwhile for the increased tax deduction. The 80% deductibility rule for meal expenses applies to both methods for transportation workers.

Maintaining accurate records of travel dates and locations is essential for substantiation. For actual expenses, this includes detailed receipts for all claimed costs. For per diem, a comprehensive logbook or electronic record proving the “away from tax home overnight” status is sufficient. Consulting with a tax professional can help drivers determine the most beneficial approach for their specific financial situation.