Understanding Per Diem Rules for Truck Drivers

This article is general information, not tax advice for your specific situation. Tax rates, limits, and deadlines change every year — confirm current figures with a tax professional or on IRS.gov before you file.

For a driver who spends 250 or more nights a year away from home, per diem is usually the single largest deduction on the return — often larger than fuel, because fuel is typically reimbursed or netted out of settlement pay while meals are not. It is also the deduction the IRS most often asks about, and the one whose rules changed most significantly in the last several years.

What per diem actually is

Per diem is a substitute for receipts. Instead of saving every meal receipt from the road and adding them up, the IRS lets you deduct a flat daily amount for meals and incidental expenses (M&IE) for each day you're away from your tax home overnight.

Two points people commonly get wrong:

• Per diem is not money you receive. For a self-employed owner-operator, it is a deduction you claim on your return. Some carriers do pay a per diem allowance to company drivers, which is a different mechanism — covered below.
• Per diem covers meals and incidentals only. It does not cover lodging, showers, laundry, or parking. Those are separately deductible with actual receipts.

Who can claim it — this is where the rules changed

This is the most important section in the article, because a lot of advice still circulating online is out of date.

Self-employed owner-operators: yes

If you're an independent contractor or run your own authority — filing a Schedule C, or receiving income through a partnership or S corporation — you can deduct per diem as a business expense. This did not change.

W-2 company drivers: generally no

Before 2018, a company driver could deduct unreimbursed per diem as a miscellaneous itemized deduction. The Tax Cuts and Jobs Act eliminated that category of deduction, and it has not returned. The practical result: if you receive a W-2, you generally cannot deduct per diem on your personal return at all.

If you're a company driver who has been claiming per diem based on older guidance, that is worth reviewing with a preparer.

The way company drivers get the benefit now is through the carrier. Many carriers run an accountable per diem plan that reclassifies part of your pay as a non-taxable per diem reimbursement. You don't deduct anything; the money simply isn't taxed in the first place.

The special transportation industry rate

Most travelers have to look up a city-by-city per diem rate. Drivers don't: the IRS publishes a single flat "special rate for the transportation industry" precisely because someone running multiple states in a week can't reasonably track locality rates.

For the IRS fiscal year running October 1, 2025 through September 30, 2026 (Notice 2025-54), that rate is $80 per day for travel within the continental United States (CONUS) and $86 per day outside it (OCONUS), which for most drivers means Canada. The same $80/$86 figures applied in the prior fiscal year.

The IRS resets these rates in a notice each October, so the federal fiscal year — not the calendar year — is what governs. If your tax year spans an October 1 change, you may have two rates in one return. Confirm the current figure against the latest IRS notice before you file; it is a one-line lookup and it changes.

The 80% limit for DOT drivers

Business meals are normally only 50% deductible. Drivers subject to Department of Transportation hours-of-service rules get a better deal: 80%.

So the deductible amount per full day on the road is:

$80 × 80% = $64 per day

That 30-percentage-point difference over a few hundred nights is real money, and it's a common place where a preparer unfamiliar with trucking leaves money on the table by applying the standard 50% limit.

Which days count

A day qualifies if you were away from your tax home long enough to require sleep or rest — in practice, an overnight. Your tax home is generally your regular place of business or the area where you live, not wherever the truck happens to be.

Consequences of that rule:

• Local and regional drivers who are home every night generally don't qualify, no matter how long the shift was. A 14-hour day that ends in your own bed is not a travel day.
• Partial days are prorated. Departure and return days count as three-quarters of a day under the method most preparers use. On a trip that leaves Monday and returns Friday, that's 3 full days plus two three-quarter days, not 5 full days.
• Days sitting at a shipper, in a repair shop, or laid over away from home still count, as long as you're away overnight.

A worked example

Take a driver with 280 qualifying nights in a year:

• 280 days × $80 = $22,400 in per diem
• $22,400 × 80% = $17,920 deduction

For a driver in a 22% marginal bracket also paying 15.3% self-employment tax, a deduction that size is worth roughly $6,700 in combined federal tax — from a figure derived entirely from a log you already have to keep.

The records you need (and the ones you don't)

The per diem method frees you from saving meal receipts. It does not free you from substantiating travel. You still have to be able to show time, place, and business purpose for each day claimed.

What holds up:

• ELD records or driver logs showing where you were and when
• Settlement statements tying trips to specific loads and dates
• Trip sheets or a simple calendar marking nights out and partial days
• Fuel and toll receipts as corroborating evidence of route and timing

The most common audit failure here is not a wrong rate — it's a driver who claimed 300 nights and can only document 240. Keep a running day count as you go. Reconstructing a year of travel from memory in March is how deductions get disallowed.

Per diem vs. actual meal expenses

You may deduct actual meal costs with receipts instead, but you have to pick one method and stay with it for the year — you can't take per diem on the light months and actual costs on the heavy ones.

In practice per diem wins for nearly everyone. Beating $80 a day in documented meal spending requires eating expensively and keeping every receipt for a year. The flat rate is both larger for most drivers and dramatically less work.

If your carrier offers a per diem pay program

Carrier per diem plans lower your taxable wages, which lowers your income tax and your FICA withholding. That's a genuine take-home increase. But because part of your pay is no longer reported as wages, there are trade-offs worth understanding before you enroll:

• Loan and mortgage applications get harder — your reported W-2 income is lower
• Social Security and disability benefits are calculated from reported wages, so decades of reduced wages can reduce eventual benefits
• 401(k) matching and workers' compensation are often calculated on wages, which may now be a smaller base
• Unemployment benefits are similarly wage-based

None of these make per diem programs a bad deal — for many drivers the immediate cash is worth more than the long-term effects. But it's a real trade, not free money, and carriers presenting it as a pure raise are leaving out half the picture.

Common mistakes

• A W-2 driver claiming per diem on Schedule A. That deduction no longer exists.
• Using the 50% meal limit instead of 80%. Costs a driver thousands.
• Counting every calendar day of a trip as a full day. Departure and return days are partial.
• Claiming per diem for nights at home. Home time is not travel, including days off mid-trip at your tax home.
• Using last year's rate. The rate resets each October 1.
• Assuming per diem covers showers and laundry. It covers meals and incidentals; keep those other receipts and deduct them separately.

The short version

If you're self-employed and out overnight, count your nights carefully, apply the current transportation-industry rate, take 80% of it, and keep the logs that prove the days. It is the highest-value hour of recordkeeping available to an owner-operator.