Opening up a trucking company. Limited experience. What could go wrong?

Deadhead costs 1.18 per mile so when considering a load u calculate the miles to pickup and subtract that from the rate. Do u still want to haul the freight? If so then go get it.

My loaded rate per miles for 2016 was 2.05. With unloaded all miles being 1.86

 

I don't like the idea of doing a % split. I want to just pay for everything that is done. I pay .45 all miles

I've seen people play funny business on loaded or unloaded but I just keep it really simple.

Also the prime reason I bought the trucks was to unload the fuel that I was getting for basically free. Though now I've had to change some things around so the fuel does end up having a cost for me but its closer to .65/gal

 

I discuss this with them when they are hired
.45 1099 skips out of the 14.9% Employment tax. Half of that would be on the employee no matter what, W 2 employees pay it on the w2 its called Social Security and Medicare 6.2% and 1.45% respectively

so .45 1099 is equivalent to .42 w2

There is Workers comp to factor in as well which for a large company I believe would be around 100 a month per employee. So yea I'm screwing them out of 3 cents a mile and 100$ a month.

The benefit to them which I've come to find out is rather beneficial is they don't end up quitting every 3 months when debt collectors attach their payroll check. Also if they setup an LLC for 99$ I can pay it directly and then they get to deduct expenses for conducting the business well beyond what a normal W2 employee gets to deduct.

IM not an accountant but I do have a finance degree. Looking at this objectively it looks to me like someone with a little bit of preparation can come out ahead going .45 on a 1099 vs .42 W2

I met with my lawyer and with my accountant at the end of December to discuss the legality of 1099 and whether or not we should continue this and ultimately they said it would be fine and likely was more beneficial to the drivers to go that route anyway.

Frankly anyone working for someone else is getting screwed. The definition of it is they do all the work and only reap a portion of the profits. Welcome to American Capitalism. The balancing factor is no one is obligated to conduct the transaction. The driver can quit at any time or I could fire him at anytime. My test has and will constantly be @ .45 are we putting drivers in the seat and miles on the road? When the answer becomes no I will raise that to .46 or .47 or wherever we have to so the answer is yes. There's no other angle to social justice here. If you want to make more go and buy the truck yourself. On the flip side of that argument I do appreciate a hard loyal worker and have full intentions of compensating those people at a higher rate. We all know that most drivers aren't going to work out. So there's no sense paying that higher rate until they are proven...

 

I appreciate your opinion and I may go the w2 route ultimately anyway. But frankly the difference of 3 cents a mile isnt going to make any difference for a driver at the end of the day. On top of that as Eska stated just one message above a driver who is at least somewhat intelligent can come out ahead of an equivalent w2 driver.

Your point in workman's comp is absolutely relevant which is why I stress to every driver to either get workman's comp or an occupational health policy. If they don't get it even after I spend 15 minutes telling them to get it and even make them sign 3 documents saying they'll get it.... What can I do?

Next step is to just clone myself and drive the truck for them.