Per diem is a flat daily allowance that covers meals and incidental expenses when a truck driver is away from their tax home overnight. Instead of saving every receipt from every meal on the road, drivers and their employers can use a standard daily rate set by the IRS. For 2024, that rate is $69 per day for full travel days within the continental United States.

Transportation workers get a better deal than most industries on the deduction. While the standard meals deduction for other businesses is 50%, truck drivers and other DOT-regulated workers can deduct 80% of their per diem. On a $69 day, that means $55.20 is the deductible amount. Over a year of 250+ travel days, that adds up fast.

Partial travel days, meaning the first and last day of a trip, are calculated at 75% of the full daily rate. So a driver who leaves Monday morning and returns Friday afternoon would claim three full days (Tuesday through Thursday) at $69 and two partial days at $51.75 each.

How you track per diem depends on whether the driver is a company employee or an owner-operator. For freight and trucking companies with W-2 drivers, the most common approach is to structure per diem payments through an accountable plan. Under an accountable plan, the company pays the per diem directly to the driver as a non-taxable reimbursement. This reduces the driver’s taxable W-2 wages, which lowers payroll taxes for both the driver and the employer. To qualify as an accountable plan, the payments must be tied to actual overnight trips, paid at or below the IRS rate, and documented properly.

The tracking itself needs to happen by driver, by day. You need a record of which driver was on the road, which dates they were away overnight, and whether each day was a full or partial travel day. Many trucking companies pull this from dispatch logs or ELD data. Some use a simple spreadsheet where drivers report their travel days each pay period. Either way, the records have to exist. If the IRS audits your per diem payments and you can’t show trip-by-trip documentation, those reimbursements could be reclassified as taxable wages.

For owner-operators filing Schedule C, per diem works as a direct deduction rather than a reimbursement. You still need to track the days and apply the same rates. Keep a log of every overnight trip with dates, destinations, and whether it was a full or partial day.

One common mistake is paying per diem on days the driver is home. The allowance only applies to overnights away from the driver’s tax home. Local routes where the driver returns home each night don’t qualify. Getting this wrong means you’re overpaying and creating a tax liability.

If you run a trucking operation and aren’t using per diem, you’re likely leaving money on the table. And if you are using it but not tracking it carefully, you’re exposed to risk. Our Bronx bookkeepers can help you set up proper per diem tracking alongside your payroll so the numbers are clean and defensible at tax time.