How do truckers get paid? With so many payment methods, there is no one-size-fits-all answer.
By the Roll Editorial Team on December 18, 2023
5 min readData shows that nearly 8 million people are employed in the American trucking industry. Almost 3.6 million of those are drivers, and most work for small businesses like yours. We know that, because 80% of the 500,00 trucking companies registered across the country are classified as small businesses. But with several different types of payment models across the industry, you may want to know: how do truckers get paid?
If you’re wondering how truck drivers get paid, we can guarantee you’re not the only entrepreneur trying to figure that out. The good news is that getting your drivers paid doesn’t need to be a drain on your time and energy, because Roll by ADP™ offers dedicated payroll solutions for trucking and transportation employers.
Our innovative app’s trucking payroll services can help with:
Chances are you've got lots of different drivers on your payroll. With Roll, you can pay your crew in a snap! We make it easy to pay all of your employees with several different pay types to choose from:
Yep, it’s really that easy! But to make sure you understand the ins and outs of trucking payroll and how truckers get paid, let’s dive into the details.
There’s no one-size-fits-all answer to the question of “how are truckers paid?” because there are several possibilities. The solution that’s right for you will depend on the types of business you run and the scale of your operations.
Here’s a comprehensive breakdown of the main options and an explanation of how each one works.
Per mile pay, or cents per mile (CPM) pay, is one of the most popular methods for paying drivers. But how exactly do truckers get paid by the mile? Good question! There are four common ways you can calculate driver mileage:
Practical Mileage
Practical miles measure the actual distance traveled on commonly used routes. You'll need to use some kind of mapping software to find the most efficient and direct routes between origin and destination points. Then it’s simply a case of multiplying the applicable mileage rate (cents per mile) by the number of miles driven. So how much does a trucker get paid per practical mile? Well, that’s up to you. For example, if you set your rate at 50 cents per mile and a driver covers 1,000 practical miles, their compensation would be $500 (0.50 x 1000).
Hub Mileage (Actual Miles)
Hub mileage, also referred to as actual miles, calculates pay based on the exact number of miles each driver covers. Unlike practical mileage measurement, it is a literal measurement of miles driven without any adjustments for routing efficiency. To accurately measure hub mileage, you and your drivers will need to keep careful records of each vehicle's odometer reading — or install onboard electronic logging devices (ELDs) to automate the process.
Household Goods (HHG) Miles
Often abbreviated to HHG, household goods miles are often called ZIP code miles or short miles. HHG miles are calculated by determining the shortest possible driving distance between the main post office in the origin and destination cities. This payment method is typically favored by companies involved with residential deliveries and home moves, and the pay structure usually considers the additional effort and care required when transporting and handling personal belongings.
Sliding Scale Mileage
Sliding scale pay adjusts driver compensation rates based on predetermined mileage thresholds or performance criteria. In other words, you set various tiers for payment, and as drivers achieve specific milestones or meet certain criteria, their pay rate per mile increases or decreases accordingly.
Pros and Cons of Paying Drivers by the Mile
When you use any of the CPM rates above, how much truck drivers get paid is directly linked to the distance they’ve covered in each shift. In theory, this makes salaries fair from both employee and employer perspectives. It’s a clear and straightforward way to calculate compensation and incorporates the flexibility to adjust pay rates based on varying distances and routes.
However, there are some potential downsides to consider:
Hourly pay rates are typically favored by businesses that operate within limited geographical areas — usually within state lines — where distances between pickup and drop-off locations are under 200 miles. Compensating drivers based on their hours rather than how far they drive usually works best for small businesses with employees who need to engage in additional activities besides driving. Examples include loading and unloading freight, interacting with clients, and performing administrative tasks like vehicle inspections or quality checks on delivered goods.
Pros and Cons of Paying Drivers by the Hour
Hourly pay provides fair compensation for non-driving tasks and time spent with clients and suppliers. Other advantages include increased compliance with Federal Motor Carrier Safety (FMCSA) regulations because drivers who are paid hourly are more likely to focus on safety than rush to cover greater distances.
However, there are some potential issues you may need to overcome:
How often do truck drivers get paid on a fixed salary? With fixed salaries, drivers receive the same amount of take-home pay every cycle, regardless of the number of miles driven or hours worked. Fixed salary payments are not particularly common in the trucking and transportation industry. Why? Because finding a gross and net salary package suitable for business owners and employers is tricky.
In fact, fixed salaries are typically only used for dedicated or specialized trucking roles where consistent, predictable earnings are essential. Examples include local delivery drivers, government drivers, and fixed-route drivers.
Pros and Cons of Fixed Salaries
Financial planning becomes easier with fixed salaries as you can make more accurate projections for company outgoings. Plus, when you offer predictable income, you may attract more experienced drivers looking for long-term employment.
However, you might face employee dissatisfaction if drivers feel their workload exceeds their pay package. And, you’ll still have to navigate the administerial issues that come with running payroll, like:
As the name suggests, a percentage of load pay structure involves determining the revenue generated from each load and paying your drivers an agreed share. This method is primarily utilized by small businesses that transport specialized or niche cargo that is either extremely valuable or requires specialized handling and expertise. Examples include hazardous materials, perishable goods, and oversize loads.
Pros and Cons of Paying by Percentage of Load
Percentage of load payments offers several advantages for both drivers and businesses. They allow drivers to earn more while simultaneously incentivizing efficiency and encouraging optimum diligence. In other words, driver compensation is aligned with your bottom-line profitability.
However, there are some potential pitfalls:
Team driving is where two drivers work together to operate a single truck over long distances. The duo takes turns driving and resting so the vehicle stays on the road almost continuously. Rates are typically higher than solo driver pay as more miles can be covered in a shorter time, and the miles are usually split evenly. For example, on a 1000-mile journey, each driver would be paid for 500 miles.
There are several advantages from a small business owner’s viewpoint, including faster delivery times, increased geographical reach, improved productivity and efficiency, and better customer service and satisfaction.
There are some logistical factors to plan for, however:
Your drivers won’t want to hassle you by calling every time they need to make a payment for something. And you’re busy — you wouldn’t want that either. You have enough going on in your days without fielding multiple calls to authorize small dollar amounts.
The same goes for additional duties. If your team regularly goes the extra mile (pun intended!) to take on tasks that don’t fall under their regular job description, you’ll want to find a way to compensate for that without having to make judgment calls every half hour on an individual basis.
So, how do truckers get paid for additional tasks and reimbursed for personal spending? Here’s a list of the strategies you can use:
Per Diem Pay
Per diem pay is a non-taxable allowance to cover expenses like hotels, meals, and other ancillary purchases. If you include per diem pay in a driver’s base pay, they can claim a $69 per day deduction while filing their taxes with the IRS.
Accessory Pay
Accessory pay acts as a bonus to cover time and expenses above and beyond reasonable expectations. It covers out-of-pocket payments like toll fees and parking charges, and use of specialized equipment like shrink-wrappers and forklifts.
Stop Pay
Stop pay is additional compensation on top of a driver’s base salary or mileage pay. It is designed to cover variables like detours due to roadworks and waiting times at each facility when multiple stops are required.
Detention Pay
Also known as layover pay, detention pay is similar to stop pay, but applies to extended waits dealing with a single facility, shipper, or receiver, rather than multiple short stops at different places.
Payroll for contract workers comes with a few extra steps, so how do truckers get paid on a contractual basis? If you use Roll’s revolutionary payroll for trucking companies, the answer is: in minutes! With industry-specific features that support multiple pay schedules and tax rates, running driver payroll becomes a breeze!
Roll’s intuitive platform collates information from across your business and automates key processes, making it a piece of cake to stay on top of your team’s payroll. Key features include:
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