For the first time in three years, the allowable driver per diem is going up. The Internal Revenue Service said the per diem for transportation workers in the 2021-22 period will be rising to $69 for travel in the continental U.S. and up to $74 for travel outside the continental U.S. Both figures represent an increase of $3.
The new rate goes into effect Oct. 1, the start of the federal budget year. The earlier rate had been in effect since 2018-19.
The increase may seem small. But if it is taken for 200 days on the road by an independent owner-operator, that works out to $600 of tax-free compensation because the per diem is viewed by the IRS as expense reimbursement. That type of compensation is not taxable. Depending on a driver’s tax rate, $600 could be seen as equaling $900 to $1,000 of taxable compensation.