Why don't I get federal overtime as an OTR driver?

The FLSA Motor Carrier Exemption (29 U.S.C. §213(b)(1)) excludes employees regulated by the Department of Transportation under the Motor Carrier Act from federal overtime. If you drive interstate and you are subject to DOT Hours-of-Service rules, you are exempt from the federal time-and-a-half-over-40 rule. Your paycheck reflects your CPM rate, accessorials, and any employer-policy premiums; it does not include FLSA overtime.

Does the "no tax on overtime" OBBBA deduction apply to truck drivers?

Generally no, for federally-exempt interstate OTR drivers. The OBBBA deduction applies only to overtime required by section 7 of the FLSA. Because the Motor Carrier Exemption removes federal FLSA overtime entitlement from most interstate OTR drivers, those drivers have no FLSA-required overtime to deduct. If your contract or employer pays a premium rate above your regular rate, that pay is not FLSA overtime and does not qualify. Drivers covered by state-specific overtime rules (for example, California intrastate drivers under §510) get the state pay but still no federal OBBBA deduction.

Is my per-diem pay taxable?

If your employer pays per-diem under an accountable plan at or below the DOT special meal allowance ($80 per day in the continental U.S. and $86 per day outside it for 2025), the reimbursement is non-taxable. It appears on your stub but does not flow into federal taxable wages, FICA wages, or state wages. Per-diem paid above the DOT rate, or paid as ordinary wages without accountable-plan substantiation, is taxable. IRS Publication 463 is the authority.

Can I still deduct meals on my taxes as a W-2 driver?

Unreimbursed employee business expenses, including meal deductions for W-2 drivers, were suspended for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. Confirm the rule for the year you are filing before relying on it. For 1099 owner-operators the §274(n) 80% meal deduction for transportation workers subject to DOT hours-of-service rules remains available on Schedule C.

What are typical accessorials on an LTL stub?

Common LTL accessorials include stop pay (a per-additional-stop flat amount after the first delivery), detention pay (per-hour after a free-loading window expires), layover pay (when you are forced to overnight away from home for non-driving reasons), touch-freight or hand-load premium, and fuel surcharge (if any portion is paid to the driver). These are not federally regulated terms; specifics are set by your contract or employer policy.

Paycheck Guide for Truck Drivers: Per-Mile, LTL Trip Pay, and the Tax Quirks

You drive a sleeper for a regional carrier on a $0.60/mile contract. Last week was a beverage run with three drops in the Midwest. Your stub just came through showing 2,500 paid miles, two stop fees, three hours of detention, and a line at the bottom called Per Diem $560 that doesn't have any tax taken out. You knew per-diem was a thing. You weren't sure how it changes the rest of the math.

Here's how a truck driver paycheck actually reads, with the rules that make it different from a normal W-2.

CPM (cents per mile)

Most over-the-road (OTR) and dedicated-route drivers are paid per mile. The math is simple in concept: paid miles × CPM rate. Most contracts pay both loaded and empty (deadhead) miles; some pay loaded miles only. The exact set of compensable miles is contract-defined and worth reading carefully.

Whatever the rate, your CPM earnings are ordinary W-2 wages. Federal income tax, FICA (Social Security 6.2% + Medicare 1.45%), and state tax all apply on the gross CPM amount plus any accessorials and bonuses paid that period. CPM is not eligible for any special-rate treatment by itself.

LTL accessorials

LTL (less-than-truckload) drivers handle multiple drops per route, often with hands-on dock work, so their pay structure adds line items beyond the per-mile rate. None of these are federally defined; specifics are set by your contract or employer policy.

Stop pay: a flat amount per additional stop beyond the first. Typical contract numbers run $15–$30 per stop.
Detention pay: per-hour pay that kicks in after a free-load or free-unload window expires. The free window is usually 2 hours.
Layover pay: when you're held away from home for non-driving reasons (waiting for a load, weather, equipment).
Touch-freight / hand-load premium: for routes where you load or unload by hand.
Fuel surcharge: usually paid to the carrier, not the driver, but some contracts pass a portion through.
Hourly while on dock: some LTL contracts switch from CPM to an hourly rate during dock time.

Accessorials are taxable wages just like CPM. They roll into your federal, FICA, and state taxable bases. The reason your LTL paystub has more lines than an OTR stub is not a tax difference; it's contract structure.

The federal overtime exception (Motor Carrier Exemption)

Standard W-2 workers get federal overtime at time-and-a-half for hours past 40 in a workweek under the FLSA. Most interstate OTR drivers don't.

The Motor Carrier Exemption (29 U.S.C. §213(b)(1)) removes the FLSA overtime requirement for employees whose qualifications and maximum hours of service the Department of Transportation has authority to set under 49 U.S.C. §31502. That covers drivers, driver's helpers, loaders, and mechanics for motor carriers operating in interstate commerce and subject to DOT Hours-of-Service regulations.

Practical effect: even if your week runs 60 or 70 paid hours, your employer is not federally required to pay time-and-a-half on anything past 40. Any premium pay above your regular rate comes from your contract or company policy, not the FLSA.

State law caveat. Federal exemption doesn't override state overtime. A driver working an intrastate route in California, for example, can still be entitled to California Labor Code §510 daily overtime even when federally exempt. See the California daily overtime guide for how that math works.

OBBBA “no tax on overtime” usually doesn't apply

The 2025 OBBBA created a federal income tax deduction for “qualified overtime compensation” — but only for overtime required by section 7 of the FLSA. Section 7 is the federal weekly 40-hour rule.

Because the Motor Carrier Exemption removes federal FLSA overtime entitlement from most interstate OTR drivers, there's no FLSA-required overtime in their paychecks to deduct. Contract-paid “overtime” (a premium rate above regular for hours past some threshold) is not FLSA overtime and doesn't qualify federally.

The exception is drivers entitled to overtime under state law that mirrors or extends FLSA. Those drivers get the state premium pay either way, but only the FLSA-attributable portion (if any) qualifies for the OBBBA federal deduction. Most OTR drivers have none. See no tax on overtime explained for the federal-side mechanics.

Per-diem M&IE: tax-free if it's structured right

The IRS allows transportation workers subject to DOT Hours-of-Service rules to claim a special meal-and-incidental-expenses (M&IE) allowance under IRS Publication 463 §274(n). Most W-2 drivers don't claim it as a deduction themselves; their employer pays per-diem as a non-taxable reimbursement.

For per-diem to be non-taxable to you:

It must be paid under an accountable plan with adequate substantiation (time, place, business purpose of travel).
The daily amount must not exceed the DOT special meal allowance. For tax year 2025, that allowance was $80/day inside the continental U.S. and $86/day outside it. The IRS publishes updated rates each fall; verify the current year's figure before counting on a specific number.
Per-diem above the DOT rate, or per-diem paid as straight wages without substantiation, is taxable like any other wage.

On the stub, the per-diem line is paid into your bank account but does not flow into federal taxable wages, FICA wages, or state wages. It's a wash on the taxable bases. Your federal withholding is calculated as if the per-diem didn't exist.

The §274(n) 80% rule and W-2 drivers. The 80% deduction limit on transportation-worker meals (vs. the standard 50%) is real, but its W-2 relevance was suspended by the Tax Cuts and Jobs Act from tax year 2018 through 2025. For 1099 owner-operators, the 80% rule remains available on Schedule C. Confirm the W-2 rule for the year you're filing.

HOS: the shape of your week

DOT Hours-of-Service rules in 49 CFR §395.3 don't directly affect your tax math, but they cap the paid-mile potential of any given week:

11-hour driving limit after 10 consecutive hours off-duty.
14-hour on-duty limit within which the 11 hours of driving must happen.
60/7 or 70/8 weekly limit (depending on which schedule your carrier runs).

Your CPM × miles ceiling for a clean HOS week is roughly 11 hours × average highway speed × the number of days you can stack within the 60- or 70-hour rolling cap. Adverse-weather and short-haul exceptions exist; they're narrow.

A worked example: OTR week, 2,500 paid miles

Back to the beverage run. Your contract: $0.60/mile, $25/stop after the first delivery, $20/hour detention after a 2-hour free window. The week:

2,500 paid miles × $0.60 = $1,500 CPM gross
3 stops total (first is free, 2 extra at $25) = $50 stop pay
3 hours of detention at $20/hr = $60 detention pay
Per-diem (5 days × $80) = $400 non-taxable reimbursement

Federal taxable wages this week: $1,500 + $50 + $60 = $1,610. The $400 per-diem does not enter this line.

Tax withholding on $1,610, illustrative for a single filer with no W-4 adjustments:

Federal income tax (Pub 15-T Worksheet 1A at this annualized income, 12% bracket): approximately $95.
Social Security 6.2% × $1,610 = $99.82.
Medicare 1.45% × $1,610 = $23.35.
State tax at an illustrative 5% × $1,610 = $80.50.
Total tax withholding: about $298.67.

Cash deposit math:

Taxable gross: $1,610.00
Tax withholding: −$298.67
Taxable net: $1,311.33
Plus non-taxable per-diem: +$400.00
Total bank deposit: $1,711.33

Of the $1,711.33 that landed, $400 was per-diem reimbursement and only $1,311.33 was after-tax wage income. If you compare this week to a week with no per-diem and a smaller mile count, the cash deposits can look comparable while the taxable-wage totals diverge significantly. Worth knowing at year-end when your W-2 Box 1 is calculated only on the taxable side.

What to watch on your stub

A correctly-issued driver stub will separate the taxable wage lines from the non-taxable per-diem line. Specifically:

CPM earnings broken out by miles × rate so you can audit the multiplication.
Each accessorial as its own line with units (stops, hours) and rate, so you can verify.
Per-diem on its own line, clearly labeled, and not included in the taxable-wage subtotal.
Federal, FICA, and state withholding calculated on the taxable-wage subtotal only.

If your per-diem line shows up inside the taxable-wage subtotal, that's the first thing to question with payroll. It changes both your withholding and your year-end W-2 Box 1.

Run your next route through the math

Mileage, accessorials, per-diem days, state mix. The math gets a lot less surprising once the app is running it.

Model your next week before you accept the load.

Last verified against 29 U.S.C. §213(b)(1) (Motor Carrier Exemption), 49 CFR §395.3 (Hours-of-Service limits), IRS Publication 463 §274(n) (transportation worker meal allowance, 2025 rate $80/$86), and IRS Publication 15-T (federal withholding) on June 5, 2026. CPM and accessorial dollar amounts are illustrative; your specific contract and stub will differ by employer, route, equipment, and state mix. This guide is informational and not tax or legal advice; for situation-specific questions, consult your employer's payroll or a qualified professional.