Everyone appreciates receiving a paycheck at the end of the pay period. Of course, many of us must deal with various deductions subtracted from the money we’ve earned.
In trucking, however, some of those deductions can drastically alter the amount of pay we receive. In some cases, those deductions can even be equal to or greater than the paycheck, resulting in no pay.
Making good decisions can help drivers manage their earnings and maximize benefits.
Know your carrier’s policies and deadlines
Drivers who are paid by the hour or run steady, regular routes can more easily predict the size of their paycheck than drivers who run irregular routes and are paid by the mile. When loads are dispatched, the information often includes the number of paid miles or the total pay for the load.
However, keep in mind that many carriers have deadlines for making delivery, making load status entries or even submitting paperwork. For example, if the cutoff is Thursday and you have a delivery on Friday, you might have to wait an additional week or two to be paid for that load.
The result can be widely fluctuating pay amounts, making it difficult to budget for payment of bills and other expenses.
It’s helpful to make sure you understand your carrier’s requirements so you can make sure you’ve done everything required by the deadline.
You’ll also need to know the carrier’s policies for accessorial pay like layover and detention. Are those items paid at the same time as the load, or is there a delay for customer approval or payment? What requirements must you meet to receive pay
for those items?
Bonuses, whether for safety, performance or other reasons, are best considered extra cash until they are actually paid. Counting on a bonus that may not arrive can result in a bad day on payday.
Keep advances to a minimum
Pay advances can have a significant impact on your take home pay. Most carriers allow drivers to advance cash from their next pay for use on road expenses. While some of those expenses are on the carrier’s behalf — such as payment of cash tolls or purchase of fluids or other items for the truck — many drivers use the advance for food and incidentals while they travel. When cash runs short again, another advance solves the problem.
Always be aware that these advances are deducted from your next paycheck amount, sometimes resulting in surprisingly low take-home pay. Basically, you’ve thrown most of your income away on the highway.
Control spending for food and incidentals
Food can be expensive on the road, and if you’re eating two or three meals a day at restaurants, the cost adds up quickly.
For this reason, many drivers have small refrigerators or coolers in their trucks, and they stock up on groceries when they have the opportunity. In addition, many drivers have an inverter that allows them to use a small microwave, slow cooker or other cooking devices to prepare hot meals.
The frozen-food section of most grocery stores has a large assortment of frozen, ready-made meals or entrees; these are perfect when you want a “real” meal. Some drivers prefer to prepare sandwiches, salads or other foods that can be eaten without heating. Either way, meals can usually be prepared in about as much time as it takes to walk into the restaurant and place an order.
Buying food in truck stop C-stores can save money over restaurants — but it still costs more than shopping at local markets or grocery stores. Some drivers plan a weekly stop to stock up, others stock up from the family pantry when they get home.
The cost of paper products can add up quickly, too. Paper towels, tissues, toilet paper and other products are much cheaper at local “dollar” stores, and even at grocery stores are cheaper than at truck stops.
Paper and plastic plates, cups and eating utensils can make meal cleanup a breeze, but the cost can add up quickly if you buy them at truck stops; look for good buys and stock up.
The owner-operator factor
Owner-operators experience all the same expenses that company drivers do — plus truck and other business expenses.
Those that are leased to carriers as independent contractors are often allowed to advance funds from future settlements. When truck repairs are necessary or a tire needs replacing, costs can add up quickly.
Some carriers offer (or require) maintenance escrow accounts, sort of a forced savings plan that can pay off when things go wrong.
Some drivers, however, simply advance whatever percentage of their next settlement they are allowed. A worse practice is the use of credit cards for fuel and repairs. Often, there’s an upfront charge of 3% to 5% for using the card in addition to the interest rate charged
if the card isn’t paid off in time.
Avoiding the use of settlement advances and credit cards is good practice, but it isn’t always possible when things go wrong on the road. Payments can sometimes be made from escrow accounts where the carrier sends money directly to the vendor, but there can be fees for that practice as well.
Using ATMs to get cash usually results in additional fees too. It’s important to know what the fees are for the various payment methods at your disposal so you’re not surprised by service charges and other deductions from your settlement.
Owner-ops who have their own authority don’t have the support of a carrier when things happen. Some use fuel or debit cards to pay for expenses while on the road, and some still carry large amounts of cash.
If you utilize the services of a factor — a business that bills your customers for you in exchange for a small percentage of the revenue — you might have access to loans against future earnings or other income. It’s important to know what your options are for the business you are working with.
Independent truckers who work with brokers, including loads found on load boards, are often allowed to advance a portion of the load revenue for road expenses, including fuel. Because the practice can differ from broker to broker, it’s important to understand what the limits are and what fees are deducted.
Whether you’re a driver-employee, an independent contractor or a trucking entrepreneur with your own authority, limiting your road expenses and the fees associated with advances and use of cards is good practice. If you own your truck, paying yourself a salary or regular amount and saving the rest against future expenses is a wise decision, too.
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.
