We are excited to announce that LTI has implemented changes, in accordance with IRS guidelines, regarding our policy on Per Diem Pay and will be allocating more of our Drivers’ mileage compensation to Per Diem versus taxable wages. This change will save you money on your payroll taxes (Social Security and Medicare taxes) as well as your Federal & State income taxes.
"This will add approximately $2,500 per year to your take home pay."
Why This Matters?
This change is comparable to a pay raise, where you’ll be taking home more money each week! For drivers averaging about 100,000 miles per year (or 1,900 per week), we estimate that this will add approximately $2,500 per year to your take-home pay. This essentially adds between 2 & 2.5 cents per mile to your pay.
2020 Payments & More
LTI is proud to inform you that due to the execution of these changes, not only will you now be earning more in the future, but you will also be receiving payment for the work you’ve already completed in 2020! LTI was able to retroactively change the Per Diem structure for work completed as far back as January 2020. So, in the coming few weeks you should be receiving a substantial check paying your reimbursements for the entire year.
Then going forward, you should expect to see a larger paycheck every week, as a larger portion of your Gross Pay will be tax-free, increasing your weekly Net Pay.
What is Per Diem Pay?
As a Driver, a portion of your pay is tax-free; this is called Per Diem Pay. It is meant to assist you in paying living expenses while you’re out on the road: meals, lodging, etc. Because Per Diem is a reimbursement for your expenses and not considered income, it is tax-free, which helps put more money in your pocket.
There are many ways Per Diem can be calculated, and it varies by company. Some companies don’t even have a Per Diem program. By changing our calculation method to most benefit the Driver, we were able to substantially increase the amount of earnings that will be tax-free. The more earnings that are tax-free, the larger the Net Pay.
Drivers, as always, we thank you for all that you do!