Originally Posted by
widebodyjunkie
So in regards to perdiem's...are they taxed? How does the payment usually work.....does the airline cut you a check at the end of the month after all of your perdiem's hours you worked for that month are added up? In addition, do airlines typically pay for your food while you're on the road, or is that what the perdiem is to be used for??
Per diem is quite simple. You are payed a fixed amount of money per time away from base. Here is an example using easy, round numbers for simplicity.
Example: your employer pays you $1.00/hr round the clock for each hour you are away from base. This includes both your time on AND off duty. So if your time away from base is 48 hours, then your per diem is going to be $48.00 for that particular trip.
How is taxed? Typically it isn't. The government sets a limit on how much of an allowance can be made for per diem. Anything paid above and beyond this amount is taxed. However, I have yet to encounter earning more per diem than I'm allowed.
Example: Let's say the government allows you up to $10,000.00 in per diem for the year, (again, using a general, round number). Now, let's say your company pays you $8,000.00 in per diem for the year, because they are not obligated to pay you the maximum allowable - that is typically negotiated in contracts. There is a $2,000.00 difference between what you could have earned in per diem. That $2,000.00 difference may be deducted for income tax purposes.
I'm not sure how it works if it goes the other way though. I've never been paid more than the maximum allowed.
Hope this answers your question.