Driver expenses and per diem: cards versus reimbursement on the road

A driver away for days at a time spends money constantly: meals, an overnight stay, showers, parking, tolls and the odd small repair. None of it is large on its own, but across a fleet and a month it adds up, and how you fund it shapes three things at once: how clean your reconciliation is, how much control you keep over what gets spent, and whether your drivers end up financing your costs out of their own pockets.

This guide looks at the two basic models for funding road expenses, what per diem actually means, and the practical pain points in between. It is general information for transport operators, not financial or tax advice, and where tax is concerned you should confirm your own position with a qualified adviser.

Two ways to fund road costs

There are broadly two models, and most operators use one, the other, or a blend. The first is reimbursement: the driver pays for things out of their own money, keeps the receipts, submits a claim, and you pay them back later. The second is a controlled company card: you give the driver a card that pays for approved costs directly, so the money never leaves their pocket in the first place.

Reimbursement is simple to start but heavy to run. It is slow, paperwork-intensive, and it ties up the driver's own cash for as long as the claim takes to process, which is a real ask of someone earning a driver's wage. A company card flips that: spend is faster, attributable and controllable, and the driver is never out of pocket. The trade-off is that a card needs proper controls, or it becomes the loose card the fraud and spend-control guides warn about.

What per diem actually means

Per diem is simply a fixed daily allowance for on-the-road costs, paid to cover things like meals and incidental expenses for each day a driver is away, instead of reimbursing every individual receipt. The appeal is administrative: a flat daily figure is far less work to process than a pile of meal receipts, and it gives the driver predictability about what they will receive.

The important caveat is tax. The way per diem is treated for tax, and the way reimbursed expenses are treated, varies by country and changes over time. Some jurisdictions treat a per diem within set limits favourably; others do not, and the rules shift. We are deliberately not quoting allowance rates or tax outcomes here, because the right figure depends entirely on where you and your drivers are based and on current rules. Treat per diem as a useful model to understand, and confirm the specific tax position with a qualified adviser before you rely on it.

The finance pain points

Whichever model you use, the same friction shows up. The first is reconciliation: keeping receipts, mileage and logs straight so that what was spent matches what was claimed or charged. Under reimbursement this means chasing paper; under a card it means matching transactions to trips and categories. Either way, the cleaner the data arrives, the less time it eats at month end.

The second is control: deciding what a driver can and cannot spend on, and enforcing it, rather than discovering it afterwards. The third, and the one that quietly damages goodwill, is not making drivers float company costs. Expecting a driver to put hundreds of pounds of fuel, lodging and tolls on their own card and wait to be repaid is both unfair and a retention risk. Controlling what drivers spend, at scale, is covered in our guide on fleet-card spend controls, and keeping that spend safe from misuse in fuel-card fraud and skimming.

How Altery fits

Altery's cards address the practical side of this directly. Per-driver cards with spend limits and merchant controls mean drivers can pay for approved costs on the road without floating your money or being able to overspend, since each card is capped and locked to the categories it should cover. That removes the float problem and the bulk of the reconciliation chasing in one move.

Because card spend is captured in real time and categorised, with alerts on unusual activity, reconciliation becomes a matter of reviewing clean, attributable data rather than assembling it from receipts after the fact. For drivers running cross-border, the underlying multi-currency accounts and cards let them spend in USD, EUR or GBP without an awkward conversion on every purchase, and you can convert on your own timeline.

On per diem and tax, Altery provides the spending and record-keeping rails, not tax advice: how an allowance or reimbursement is taxed depends on your jurisdiction and current rules, which a qualified adviser should confirm. Altery is not a bank, and this is general information rather than financial or tax advice.

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