OTR & Hourly Pay

I just pay myself, as an employee driver of my company, a flat $750 a week salary (average prevailing wage of heavy truck drivers in my state per the Dept of Labor). The profits that my company makes above that, I take in distributions. Get to avoid a lot of FICA tax that way. If I was running additional drivers, would do it similarly. A flat salary per week, with additional pay based on surpassing a minimum miles per week, i.e. Performance pay. That way a driver has a minimum paycheck they can count on each week. A nice balance between a hourly thing and a per mile thing. Of course, not meeting a minimum number of miles per week would demand some very good explanations. No one is going to run one 500 mile load a week and collect a paycheck. A person must be available for every dispatch that week unless given authorization otherwise, or they only get paid for what they run on a per mile basis, and then probably an invitation to go find another job. Only equipment downtime would exempt them. But they would still get the minimum paycheck.

Not sure, but I think that would solve a lot of heart burn for drivers and carriers if carriers would follow a similar approach.

 

Until the IRS determines that extra pay is payroll and someone needs to pay back withholding and penalties and fees.
You as an owner of the company makes this legal, not sure you could do the same for employees.

 

I didn't say anything about any reduction of FICA on an employee. That wouldn't be the case. It is for me, as that is how it works from an S Corp Tax structure. But a employee, both salary and performance pays would be both subject to income tax and FICA. I was purely talking about having a set salary per week that would give a solid minimum pay for a driver and stability. Please read what I wrote and not what you think I wrote.

 

You can have all sorts of freedom, but what we were paid as a team over 168 hours in a workweek, which is ALL 168 hours in a week, versus what that truck brought in for both of us was less than 3.00 an hour some weeks and more than 7.60 an hour other weeks when the miles fell into place. Somewhere in there.

If you took 3 days off at the house, youre making less than three for the whole week. It's gone. There is no way to "Make" it up. We grossed 65,000 over 306 service days away from home, that worked out to 7344 hours total for a final average of 8.85 to two people or right round 4.42 something each driver in that cab hourly. A very large benefit that year was Per Diem at 44.50 a day for both of us. The deduction that resulted erased the tax bill for that year for uncle sam and our excessive withholding of around 200 per week out of total payroll made the state tax liability zero and provided us a small refund which with to start the new year over again.

Sure you can increase the wages to 15 dollars, or even 30 dollars an hour. It would just made the tax liability bigger and make a move to a non state tax state such as TN, FLA or SD a real possibility. A profitable one.

No company can remain in business long paying drivers to sit for 34 hours reset far from home at 15 or 30 or whatever per hour. Multiply that by 10,000 trucks for a mega carrier and you have grounds for a closure of that employer.

 

This is what I think I read; That I think your wrote. That I interpret as you saying you would pay your drivers similarly. As your first few words determine employee pay.
That would be gray area to illegal, unless your employees held stock in the corporation and every share was paid dividends, as in a C corporation.

 

Nope. Would be same as piece count bonus at a factory for an employee. A base salary, then if minimum piece count was reached, then bonus for piece count over minimum would kick in. Both salary and bonus would be considered payroll for both income and FICA taxes since they are an employee only. A per mile bonus above the minimum would garner a bonus that would be applied to taxable salary for a driver.

Unlike myself, who owns the company, I get a base salary as an employee of my company, then all profits the company makes then is dispersed to me, since I am the sole owner. Salary is subject to income and FICA tax, but dispersants are only subject to income tax.

Simple. You are trying to pick at words instead of looking at the picture. You have taken the word "similar" and twisted it to fit what you wanted to see.

 

Not really. Just pulling your leg a little. Have a great night.