Guide

Labor, rig and per diem are three different things

This is a record keeping guide, not tax advice. How your numbers get treated is between you and your CPA. What follows is about keeping records that let them answer the question at all.

Three buckets, one ticket

A rig welding day usually contains at least three kinds of money:

Labor. Pay for your time.
Rig or truck. What the customer pays for the use of equipment you own and maintain: the truck, the machine, the leads, the fuel it burns.
Per diem and mileage. Reimbursement for being away from home.

Those are not the same thing economically, and they are not treated the same way. The problem is that most invoices flatten them into one number, and a 1099 at the end of the year is a single figure with no breakdown behind it.

Why preparers keep asking for the split

The pipeline construction industry has a long standing IRS revenue procedure, Rev. Proc. 2002-41, covering optional reimbursement arrangements for welders and heavy equipment mechanics who furnish their own rigs. Whether and how it applies to you depends on how you are engaged, what your contracts say and what your customer does. That is exactly the sort of question a CPA can answer in ten minutes if you can show them the split, and cannot answer at all from one lump sum.

The practical version: your preparer needs to see how much of the year was labor, how much was equipment, and how much was reimbursement. If your records can produce that, you get a real conversation. If they cannot, you get an estimate.

What good records look like

Separate rate lines on every ticket, not a blended hourly figure
Per diem stated as a daily amount on its own line
Mileage logged as miles at a rate, not folded into the rig rate
Signed tickets kept, since the ticket is what backs the invoice
Receipts categorised as you spend, not sorted in April
A year end total by category you can hand over in one file

Expenses that go with the rig

Fuel, welding consumables, leads and cables, machine maintenance, tyres, insurance, tools, hotels on the road. Photograph the receipt at the point of sale, tag it to the job, and it is filed. The reason to do it there is not diligence, it is that a faded thermal receipt in a console cup holder in March is worth nothing.

How RigTicket handles it

Every rate line carries one of four fixed categories: labor, equipment, reimbursement or materials. They are fixed on purpose. If users could invent their own, the year end report would stop meaning anything the moment two people used the same word differently.

At the end of the year, the pay stack report totals each category for any date range and exports to CSV, along with expenses by category and income by customer. That is the file your preparer wants.

Talk to a CPA who knows the field