PER-DIEM

MEAL

EXPENSE REIMBURSEMENT

Yes, due to popular demand, we are bringing the subject back into the spotlight.

 

Now it is up to you to determine if the benefits of Per Diem outweigh the concerns. Please review the information below in its entirety and make a wise decision. You will be asked to vote below and submit your vote to help us determine if this will be implemented. The goal is to have this vote finished and the results implemented by February this year.

PAY

BENEFITS

It seems simple

but it is not

What is Per-Diem?

For jobs where employees are away from home for a extended period of time, the IRS came up with a Meal Reimbursement policy (Per-Diem) which says that a portion of the employee's paycheck is not to be taxed in order to offset the costs associated with being away from home. This means that every employee is entitled to to exclude up to $66 / day of his earnings from federal and state taxes. 

Who pays for it?

This is not to be confused with a bonus or additional pay. Per-Diem is a part of your current pay which would be excluded from taxes. The Per-Diem portion is calculated based on the days away from home, summed up and excluded from the taxable income.

How does it work?

This may be easier to explain with an example. Below you will see a direct comparison using our current payroll compared to the Per-Diem payroll if this option were to be adopted.

 

We will be calculating the pay based on a $1800 gross income and 6 days away from home.

GROSS INCOME

TAXABLE INCOME

CA

CASDI-E

FITW

MED

SS

NET INCOME

TAKE HOME

$1800.00

$1800.00

$  112.73

$    18.00

$  244.38

$    26.10

$  111.60

$1287.19

$1287.19

WITHOUT PER-DIEM

WITH PER-DIEM

GROSS INCOME

          PER-DIEM (-)

TAXABLE INCOME

CA

CASDI-E

FITW

MED

SS

NET INCOME

          PER-DIEM (+)

TAKE HOME

$1800.00

       $  396.00

$1404.00

$    72.22

$    14.04

$  157.26

$    20.36

$    87.05

$1053.07

       $  396.00

$1447.07

This example shows us that by using the Per-Diem calculation, this driver saved $159.88 in taxes which increased his take home. 

Why wouldn't you?

The only drawback of this program is that it reduces your gross income. This may be important to some of you when you consider that your gross income is used to determine your retirement, benefits, insurance or eligibility for a home loan, car loan etc.

In order for this program to work, the per-diem amount is considered tax free income, and therefore does not get calculated into your gross pay at the end of the year. Instead, this income will be reported in Box 14 of your W2 as Tax free Income or Pre-Tax deductions such as Medical Insurance and 401k Income. 

This is in your hands now.

 

submit your vote today

Thank you,

we will advise you of the outcome.