How Does Per Diem Work for Truck Drivers: Rates, Taxes, and Records

Per diem for truck drivers is a tax-free daily allowance that covers meals and incidental expenses while you’re away from your tax home. For 2026, the IRS special transportation industry rate is $80 for each full day of travel within the continental United States and $86 for each full day outside it.¹ If you’re a company driver, your carrier pays it through payroll as a non-taxable reimbursement. If you’re an owner-operator, you claim it as a deduction on Schedule C. Either way, taking per diem trims your taxable income now but can shrink your Social Security benefits and borrowing power later.

Do You Qualify for Per Diem

Two IRS tests decide whether you can claim per diem at all.

The first is having a tax home. Your tax home is the entire city or general area where your main place of business is, regardless of where your family lives.² For most long-haul drivers, that’s the terminal or dispatch location you’re based out of. If you have no fixed business location, the IRS may treat your residence as your tax home, but only if you have real living expenses there.

The second is the sleep-or-rest rule. Your job has to keep you away from your tax home for substantially longer than a normal workday, and you must need sleep or rest during that time to do your job.³ A quick nap in the cab on a route you could have finished the same day doesn’t count. Per diem is designed for over-the-road and regional drivers, not local routes that end at your own driveway.

2026 Per Diem Rates and What They Cover

Under IRS Notice 2025-54, effective for travel on or after October 1, 2025, the special meal and incidental expenses (M&IE) rates for the transportation industry are:¹

$80 per full day inside the continental United States (CONUS)
$86 per full day outside the continental United States (OCONUS), including Alaska, Hawaii, and U.S. territories

Those figures are up from the $69 and $74 rates in effect from October 2023 through September 2025. The IRS updates the amounts each federal fiscal year, running October through September, so check the current notice before you calculate.

The rate covers all meals (including room service), laundry, dry cleaning, pressing, and tips for service providers like food servers and luggage handlers.⁴ It does not cover lodging. Sleeping in your truck’s sleeper berth doesn’t give you a separate lodging claim, because you have no lodging expense to reimburse.

Partial Days on the Road

You don’t get the full rate on every day of a trip. Federal travel regulations reimburse the first and last calendar day of a trip at 75 percent of the applicable M&IE rate.⁵ For a CONUS trip in 2026, that’s $60 on the day you leave and $60 on the day you return, with full $80 days in between.

How It Works if You’re a Company Driver

If your carrier runs a per diem program, the payment comes to you through payroll as a non-taxable reimbursement under the carrier’s accountable plan. You don’t claim anything on your personal return. The per diem portion simply never appears as taxable wages on your W-2.⁶

Carriers typically use one of two methods:

Cents-per-mile. The carrier designates a portion of your mileage rate as non-taxable per diem. If your total rate is 55 cents per mile, the company might classify 12 cents of it as per diem, and that 12 cents doesn’t show up as taxable wages.
Flat daily rate. The carrier pays a fixed dollar amount for every qualifying day on the road, up to the IRS limit. Reimbursement is tied to time away from home rather than miles driven.

For the reimbursement to stay tax-free, it has to be paid under an accountable plan: you submit records of your travel, the payment doesn’t exceed the federal rate, and you return any excess.⁶ If the arrangement fails any of those requirements, the IRS treats the entire reimbursement as taxable wages in box 1 of your W-2.

If your carrier doesn’t offer per diem, you’re largely out of luck. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and that suspension has since been made permanent. As a W-2 driver, you can’t deduct your own meal costs, so whether a carrier offers a per diem program is a real dollars-and-cents factor when you’re comparing jobs.

How It Works if You’re an Owner-Operator

Self-employed drivers claim per diem as a deduction on Schedule C of Form 1040, which lowers your net business income.⁷ Because the deduction reduces net self-employment income, it lowers both your income tax and the 15.3 percent self-employment tax that funds Social Security and Medicare.

There’s a catch specific to transportation workers. Most business travelers can only deduct 50 percent of meal costs. Drivers subject to Department of Transportation hours-of-service limits deduct 80 percent.⁸ So your deductible per diem is $64 per qualifying CONUS day ($80 × 80%), not the full $80. The remaining 20 percent isn’t deductible. Company drivers whose carrier reimburses under an accountable plan don’t need to do this math; the employer handles it.

You can choose between the standard per diem rate and actual meal expenses, but pick one and stick with it for the whole tax year.⁹ Using the standard rate is simpler because you don’t need individual meal receipts, just a reliable log of your travel dates and locations.

The Trade-Off: Social Security and Loans

Per diem lowers your reported taxable income, and that has consequences beyond this year’s tax bill.

Social Security retirement and disability benefits are calculated from your lifetime earnings record: the wages and self-employment income reported to the IRS. When per diem shifts part of your compensation from taxable wages to a tax-free reimbursement, your earnings on paper go down. Across a full career, that can meaningfully reduce the monthly benefit you collect in retirement.

The same logic applies to credit. Lenders look at taxable income on W-2s and tax returns. A driver earning $70,000 with $12,000 in per diem shows roughly $58,000 in taxable wages, which can reduce mortgage or auto loan approval amounts. Younger drivers with decades of earnings ahead may want to weigh the immediate tax savings against long-term Social Security impact. Drivers closer to retirement, whose earnings record is mostly locked in, face less downside.

What You Need to Keep

Whether you’re on a W-2 or self-employed, the IRS requires proof of the time, place, and business purpose of every trip you claim per diem for.³ Your Electronic Logging Device records do most of the work, since they automatically document where you were and how long you were away.

Using the standard rate, you don’t need individual meal receipts. ELD data plus a simple log noting your travel dates and whether you were in CONUS or OCONUS is enough. If you deduct actual meal expenses instead, save receipts showing the date, amount, and name of each establishment.³

Keep supporting records for at least three years from the date you file the return that includes the deduction.¹⁰ Company drivers should hold on to copies of submitted logs even after payroll processes the per diem, because a failed accountable plan can convert the entire year’s reimbursement to taxable income on audit.

1
IRS.gov. 2025-2026 Special Per Diem Rates Notice 2025-54
2
Internal Revenue Service. Topic No. 511, Business Travel Expenses
3
Internal Revenue Service. Publication 463 (2024), Travel, Gift, and Car Expenses
4
IRS.gov. Per Diem Rates Frequently Asked Questions
5
eCFR. Part 301-11, Subsistence Expenses
6
Internal Revenue Service. Publication 463 (2024), Travel, Gift, and Car Expenses – Section: Reimbursements
7
IRS.gov. Per Diem Payments Frequently Asked Questions
8
Office of the Law Revision Counsel. 26 U.S. Code 274 – Disallowance of Certain Entertainment, Etc., Expenses
9
Internal Revenue Service. Revenue Procedure 2019-48
10
Internal Revenue Service. How Long Should I Keep Records