zip code pay and per diem...

Discussion in 'Questions From New Drivers' started by negativecold13, Nov 23, 2014.

  1. negativecold13

    negativecold13 Medium Load Member

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    Gilmer, Texas
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    I am finding out that some companies pay zip code to zip code. Is this good, bad, or not enough difference to really matter? Also, is it good to do per diem? Thanks, again.
     
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  3. flyingmusician

    flyingmusician Road Train Member

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    Both are bad.

    Zip up to zip miles end up being 10-15% shorter and in some cases more than what you actually drive.

    My previous company paid zip to zip and my average variance was 14% year to year I drove but wasn't paid for. I'm paid practical miles now ( essentially rooftop to rooftop ) and that variance is only 2.7%

    Per diem only works in the companies favor, not yours. It looks good on paper and you get more take home in your check but at the end of the year your taxable income is less and that hurts you in everything from qualifying for a mortgage to how much social security you get when you retire......assuming those of us under a certain age will get any at all once we reach that age.

    My current company doesn't pay per diem so my taxable income is accurate and I claim it at year end. As this is my first year non-per diem I can't offer a figure on the difference as of yet.

    Practical or hub mile pay is much more accurate and skip the per diem pay if you have the option.
     
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  4. SLANT6

    SLANT6 Road Train Member

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    Zip to zip is the standard pay structure for most IBT (Teamster) represented companies. Based on zip to zip mileage from the Household Movers Guide, the industry standard for mileage. It pays point A to point B period. Hubometers can be off. HHG miles standardize things.
    Per diem works in the companies favor? The alternative is zero per diem which is in the companies pocket now instead of yours. Something is better than nothing.
     
  5. flyingmusician

    flyingmusician Road Train Member

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    It sure doesn't work in the drivers favor by lowering the taxable income at year end or paying less than the miles they actually work. unless you just have a need to show a lower income on your tax return. If you're looking for govt assistance or trying to cheat an ex wife out of more alimony or child support then I can see where the lower taxable income could be an advantage.

    There are other threads on here where some companies even charge a .01-.02 per mile fee to 'administrate' the per diem.

    I dont fully understand the ins the ins and outs of it but I have been on both and both the zip to zip miles and the per diem cheated me big time both week to week and year end. There is an excellent in depth explanation of it someone did in another thread the OP would have to do a search to find but it's in here.

    It it all boils down to what works best for each individual's situation, but I don't see where cheating an employee out of 10-15% of the miles they drive at any rate of pay is helping the driver.
     
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  6. SLANT6

    SLANT6 Road Train Member

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    You can argue all by yourself. If your load from zip A to zip B is 200 miles by HHG, and you are paid for 200 miles, however you run 180 to get there, who is cheating who? On the other hand you are paid 200, but actually run 220, well now you are being cheated huh? It all evens out at the end of the day. Don't like it? Don't work for that type of company.

    HHG miles are the industry standard like it or not.
     
  7. flyingmusician

    flyingmusician Road Train Member

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    Which is in large part why I dont work for that company anymore and now get paid for very close to every mile I drive.

    It doesn't even out because the trips where you run less than the hhg miles are the exception not the rule.....at least in the otr environment. I could see where LTL/p&d type operation where drivers run the same or close to the same daily/weekly routes and can find local shortcuts it very well could even out day to day. Hhg may be the standard but not all companies use it.


    The OP would be well served by other viewpoints on the subject.
     
    blairandgretchen Thanks this.
  8. double yellow

    double yellow Road Train Member

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    Zip to zip shorts miles by 5-10%. As long as your pay is 5-10% higher, no harm no foul. It is industry standard so brokers can get competitive quotes on the open market without revealing their customers until the carrier signs a contract. Otherwise carriers could easily try to go around the broker and work directly with the shipper. It wasn't designed to screw a driver.

    Perdiem treats a portion of your income as an expense reimbursement, which lowers how much you pay in medicare, social security, income tax, & garnishments. It also lowers how much the company pays into social security & medicare.

    You could claim per diem yourself at the end of the year, but if the company does it for you, you can also take the $6200 standard deduction too. If you claim per diem on your own, you lose the standard deduction. Also, if you claim per diem yourself, you cannot get a refund on the medicare and social security that you overpaid throughout the year.

    There are two downsides:

    1) if you are a moron and try to retire on social security, your monthly payments will be lower if you were on company per diem. Don't be a moron and rely on social security.

    2) If you are injured at work, your worker's compensation is based on your income. Per diem is not treated as income, so your worker's comp payments will be lower.


    Do not listen to people who claim you may not qualify for the same mortgage on per diem -- they are full of it. Your w2 lists per diem in box 14 as "other income" -- it will be included into any calculation a reputable lender uses to determine eligibility.


    My advice: take company per diem as long as the company does not charge an administrative fee.
     
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  9. SLANT6

    SLANT6 Road Train Member

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    HHG is not a viewpoint but rather fact. Liking it or not is a viewpoint.

    I don't know why I even bother. Carry on.
     
  10. Surfer Joe

    Surfer Joe Heavy Load Member

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    Another small fry with the big fish attitude.

    First of all, zip to zip is absolutely intentionally screwing drivers. Period. The origination of the zip to zip quote was initially due to the fact that, yes, competition was somewhat obscured with the hidden 'specifics' of exact locations; if not the specific competition's actual business name. But it didn't take the trucking companies long to figure out that they can also save big time on driver pay when it is also based on zip to zip. Kind of a language trickery thing, "Hey, we base our quotes on zip to zip, so therefore, so shall your pay".

    Companies can (and do) compensate for actual cost per mileage in their pricing, and all variables are considered; and in a law of averages business such as this, all actual hub miles are eventually compensated.

    Except for the company driver. His 'averages' are carefully considered into that ol' company bottom line. And thats exactly where he gets it. In the bottom.

    And in regards to anyone being a 'moron' when it comes to social security, I would have to say, don't ever get sick or hurt to the point where you cannot work. And God forbid that the economy doesn't completely crash to where there is absolutely no work available to you whatsoever; which could wipe out whatever savings and/or possessions that you may have. It does happen. And may happen again sooner than we might think.

    And you might want to add one more thing to that list of human weaknesses and pet peeves of yours:
    Don't ever get old.
     
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  11. double yellow

    double yellow Road Train Member

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    Not many big fish started with small fry attitudes.

    Company A offers 40cpm HHG. Company B offers 38cpm practical. Company C offers 36cpm hubometer. How is company A screwing its drivers when at the end of the year, all 3 companies are paying the same?

    No, ignorant drivers screw themselves by accepting a job without understanding what it entails, so I believe society is best off when its citizens are capable of making their own informed decisions. The original poster was wise enough to ask how these options might affect him, so I offered a fairly comprehensive answer. He's free to make his own informed decision.

    You seem to believe society is best off when some benevolent central power oversees everything. That may be true in theory, but enlightened despots simply don't come around that often.

    Relying solely on a government safety net is not a very wise plan -- especially when that same government has been robbing the till to pay for more and more programs and has been forced to break its original contract and has raised the retirement age (to one higher than the average life expectancy of a truck driver, I might add). Even so, it is still facing insolvency (don't take my word for it -- go straight to the source: http://www.ssa.gov/oact/trsum/ ). That's why you should have contingencies like private retirement, private insurance, etc. And not just one -- redundancies are good...

    If you think economic crashes are terrible, consider the consequences of a revolution! The average great civilization lasts 200-250 years (the U.S. is 238 years old). Surely you don't think the next government is going to honor the obligations of this one? Or are you so certain that "this time is different" & the USA will last forever?

    So yes, relying on social security is moronic. If it is there when you retire -- fantastic, you've got a bonus. But if it is not, you should already have contingencies in place so you can get on with your life rather than adding yet another item to your list of reasons why things didn't turn out how you expected.
     
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