Per Diem
A daily tax deduction for meals and incidental expenses while away from home overnight for work.
Per Diem in Practice
It's a Flat Daily Rate, Not Receipts
Per diem uses an IRS-set daily rate for meals and incidentals rather than requiring drivers to save and total every food receipt from the road, which simplifies recordkeeping significantly.
It Only Applies to Days Away From Home
Per diem can only be claimed for days a driver is away from their tax home overnight for work, so a local route with no overnight stay generally doesn't qualify.
Company Drivers See It Differently Than Owner-Operators
Some carriers pay company drivers a per diem rate as part of their paycheck, which changes how it's taxed, while owner-operators typically claim it as a deduction on their own tax return instead.
Per Diem: What It Means and Why It Matters
Per diem is one of the more valuable, and more misunderstood, tax tools available to truck drivers, since it lets drivers deduct a daily flat amount for meals and incidentals rather than tracking every receipt from the road. Understanding how it works matters at tax time, but it can also affect take-home pay throughout the year for company drivers whose employer offers a per diem pay structure instead of a standard deduction.
How Per Diem Actually Works
Per diem lets a truck driver deduct a daily flat amount for meals and incidental expenses incurred while away from their tax home overnight for work, rather than tracking and deducting the actual cost of every meal individually. The IRS sets a standard daily rate for the transportation industry that changes periodically, and drivers can generally deduct a percentage of that rate for each qualifying day on the road.
A Practical Example
Say the applicable daily per diem rate is $69 per day, and a driver is away from home overnight for 20 days in a given month. Rather than saving every meal receipt from those 20 days, the driver can generally claim a percentage of $69 for each of those 20 days as a deduction.
Multiplied across a full year of regular over-the-road driving, that daily deduction adds up to a meaningful reduction in taxable income, which is why per diem is one of the more valuable tax considerations for a driver who's regularly away from home overnight.
Why Per Diem Matters for Owner-Operators
Because owner-operators are running an independent business, every legitimate deduction directly reduces the taxable income that determines their tax bill. Per diem is one of the simplest deductions to apply consistently, since it doesn't require saving individual meal receipts, just an accurate log of which days involved overnight travel away from home.
Common Per Diem Mistakes
The most common mistake is not keeping an accurate log of which days actually qualified for per diem, since the IRS expects a driver to be able to substantiate the nights spent away from home even though individual meal receipts aren't required. The second is confusing per diem pay, a company driver pay structure, with the per diem tax deduction, which work differently and have different tax implications.
Related Calculators
Related Finance & Rates Terms
Carriers on Per Diem
“Per diem simplified my taxes more than almost anything else once my accountant walked me through it. No more digging through a shoebox of meal receipts.”
“I keep a simple log of every night I'm away from home now. Made claiming per diem at tax time so much easier than trying to reconstruct it later.”