Per Diem for Truck Drivers: How to Build a Compliant Program That Saves Money

The Real Tax Savings for Carriers and Drivers

The financial case for a well-structured truck driver per diem program is compelling for both the carrier and the driver. For drivers, per diem payments are excluded from gross income under an accountable plan — meaning they don’t pay federal income tax, Social Security tax, or Medicare tax on those amounts. On a $15,000–$20,000 annual per diem, a driver in the 22% federal tax bracket saves $3,300–$4,400 in federal income taxes alone, plus the FICA savings on top.

For the carrier, the savings come from the employer’s share of FICA taxes — 7.65% of wages. On a fleet of 50 drivers each receiving $15,000 in annual per diem, that’s over $57,000 in annual payroll tax savings for the carrier. Those savings can fund the administrative cost of running the program many times over. The IRS guidance on per diem rates and accountable plan requirements is published in IRS Publication 463, which covers travel, gift, and car expenses including the special transportation industry rules.

Per diem programs for truck drivers are one of the most valuable — and most misunderstood — tools available to carriers. A well-structured truck driver per diem program reduces payroll tax liability for both the carrier and the driver, increases driver take-home pay without raising base wages, and creates a real competitive recruiting advantage. A poorly structured one creates IRS exposure that can result in back taxes, penalties, and interest that wipe out years of savings. Here’s what fleet managers need to understand to build a truck driver per diem program that actually works.

Table of Contents

• What a Truck Driver Per Diem Program Actually Means
• IRS Rates and Rules for Truck Drivers
• Building an Accountable Plan
• Common Pitfalls That Kill Per Diem Programs
• The Real Tax Savings for Carriers and Drivers
• How FleetFlo Manages Per Diem Compliance

What a Truck Driver Per Diem Program Actually Means

Per diem — Latin for “per day” — is a daily allowance paid to drivers to cover meals and incidental expenses incurred while traveling away from home on behalf of the carrier. Because these payments reimburse business expenses rather than compensate for labor, the IRS treats them differently than wages. When a truck driver per diem program is structured correctly under IRS accountable plan rules, per diem payments are not subject to federal income tax withholding, not subject to FICA (Social Security and Medicare) taxes, not subject to FUTA taxes, and fully deductible as a business expense for the carrier.

For a driver earning $60,000 per year with $20,000 in qualifying per diem under a compliant truck driver per diem program, annual tax savings can exceed $3,000. For the carrier, FICA savings on that same amount approach $1,500 per driver — significant at any fleet size, transformational at scale.

IRS Rates and Rules for Truck Drivers

The IRS sets maximum per diem rates specifically for transportation workers subject to DOT hours-of-service regulations. For 2025, the special transportation industry rate is $80 per day for CONUS travel and $86 per day for OCONUS travel including Alaska and Hawaii. Under a compliant truck driver per diem program, transportation workers can deduct 80% of the applicable rate — a higher deductibility percentage than the standard 50% meal deduction for most other business travelers.

Accountable Plan Requirements for Your Truck Driver Per Diem Program

For your truck driver per diem program to deliver tax-free treatment, it must operate under an IRS accountable plan. Three conditions are required: a business connection (the driver must be traveling away from their tax home for work purposes); substantiation (trip logs, dispatch records, or ELD data documenting the time, place, and business purpose of each trip); and return of excess (any advance above actual expenses must be returned within a reasonable period). Failing to meet these requirements converts the entire per diem to taxable wages — retroactively — which is why IRS audits of improperly structured truck driver per diem programs are so costly.

Common Compliance Pitfalls That Undermine Truck Driver Per Diem Programs

The mistakes that most often cause truck driver per diem programs to attract IRS attention: paying per diem to local drivers who return home daily (only drivers traveling away from their tax home overnight qualify); paying per diem on vacation days, sick days, or home time; paying rates above the IRS maximum without treating the excess as taxable wages; failing to maintain trip documentation; and applying the program inconsistently across the driver pool, which raises questions about whether the program is legitimate.

According to the IRS guidance on business travel expenses, the accountable plan rules are strictly enforced for transportation workers specifically because per diem has historically been a common area of abuse.

How a Managed Truck Driver Per Diem Program Works

The administrative overhead of running a compliant truck driver per diem program — tracking qualifying days, applying correct rates, maintaining documentation, integrating with payroll — is enough to deter many carriers from offering it at all. That’s a costly oversight. A managed program handles all of that automatically: qualifying days calculated from dispatch or ELD data, rates updated when the IRS publishes changes, documentation maintained for audit purposes, and seamless payroll integration.

Our per diem management services handle every aspect of your truck driver per diem program — from initial setup through ongoing administration and audit support. Contact Fleetflo to find out exactly what a compliant per diem program would be worth to your fleet’s bottom line.