Confused about driver's pay

Lol you my freind just opened a can of worms, I will just set back and take it all in, let the games begin

 

After the IRS audits you for paying a full time driver, fully under your control, being paid as an independent contractor, you won't have to worry about how much you are paying him, or your truck and trailer either.

In years past you could have gotten by with that, as I have been paid with a 1099, and I have paid drivers with a 1099. In todays world, you won't get by for long, plus this is cheating your driver. He is now having to pay YOUR part of his payroll taxes you are supposed to pay, thus shorting him.

With Quickbooks, and as easy as it is to get set up as an employer, there is no excuse to pay a driver the way you are, except you do not want to do the paperwork involved, send in his taxes, and are too cheap to pay him legally. I bet you don't have workers comp on him either. If the IRS don't get you, just wait until your driver gets into an accident, or he gets audited. This is not the 70's or 80's. You are playing with fire in order to save a few dollars at the drivers expense.

 

$.35 is a pretty standard rate but you need to get him on a W-2 immediately for the reasons the poster above me outlined.

As far as detention and layover go, calculate what the driver would have made at his cpm driving in that time. After 2 hours (standard), detention paid at $.35cpm x 60mph = $21/hr. Layover should be 8hrs at that rate, or $168.

Other things to consider are extra tops (typically 1-2hrs, say $30 each). Obviously you cover scales and tolls. Reefer loads bring in lumpers or loading/unloading pay equivalent to lumper charges (make sure your occ haz ins covers driver unload if he's touching the freight).

Im sure i'm forgetting something. If you're not making enough to do all this, please stop screwing your driver around and get out of the way. Or look at ways to reduce your costs (fuel and maintenance are key areas here).

 

Please continue updating this thread.

Curious about the final outcome.

Even though most of us already know...............


I wish you Good Luck !!

Keep us posted !!

 

This is a driver, he should get paid for what he runs regardless of what's in the box. $.35cpm across the board.

As a friendly suggestion, fuel is your biggest expense and that's where your focus needs to be if you want to make a profit. You will spend far more on fuel than on your driver. Do everything you can to improve fuel usage, even if it means slowing the truck down and paying the driver more for his time. Everything from boost leaks to cruddy tires to bad aerodynamics will cost you fuel. Get the truck running right, and at the right speed and driver pay will not be an issue for you.

Use the various sections of this forum to ask questions about your truck and what you and your driver can do to keep as much profit in the bank as possible.

 

Actually, being the company owner,

fuel will be your 2nd biggest expense.

Driver will be 1st biggest.............

 

100,000 mile/yr schedule, just to keep an even number.

Driver at $.35cpm plus ancillaries and her portion of his W-2 tax...

$35,000 mileage pay + $5,000 ancillary pay + $2,700 payroll tax + $2,500 occ haz etc. = $45,200

Truck averaging 6mpg, 1600hrs idle/yr @ 1gal/hr, and 5% out of route. Fuel price $3.50/gal...

Base fuel $58,333 + Idle fuel $5,600 + OOR fuel $2,917 = $66,850.

Am I missing something completely obvious here? Her driver is costing about 2/3 of what her fuel is. She could provide him full benefits at no cost, plus a 401k match and probably still not eclipse her fuel cost in the above model. I don't know, maybe i'm way off base here but i've never once deluded myself, as a company driver, into thinking I was worth more than the fuel in the tanks. Its a harsh reality with fuel prices what they are these days. I would say if the truck were set up properly and had a committed driver, that gap could close significantly as mpg rose..