When it comes to the salary of truck drivers, different companies handle it in different ways. However, companies prefer certain options overall due to their convenience and employee preference. So, let’s look at the most popular methods of payment companies like to use and why they prefer to use them.
Truck drivers are paid in various ways, from monthly salaries to percentage per load, but the most common methods are compensation per mile and hour. Payment methods are negotiated depending on the type of loads and distances truckers are responsible for and their years of experience.
Employers have favored different forms of compensation over the years, and recently, certain payment methods are becoming more popular due to technological advancements. Consequently, new contracts are created, and experienced and skillful truckers are negotiating different compensation methods as well as bonuses concerning their routes and safety.
How Does Pay Per Mileage And Hour Work?
Many long-haul truckers are paid by the mile instead of per hour as this provides the “carrier” with a certain performance guarantee. Drivers who are focused and skilled and can complete their route at an ideal time will actually find payment per mile more advantageous than compensation per hour.
However, Truck drivers who usually have shorter distances to complete, like those working for grocery chains, are often paid by the hour for their services. Hourly pay is easier for large companies with many drivers doing short distances.
In recent years, truck drivers’ per-mile compensation has been adjusted to match the average hourly wage in the current market rates. However, if a driver is paid $25 per hour on a 12-hour route but is able to complete the whole route in 11 hours, they will benefit from using a compensation per mile structure.
Therefore, truck drivers are incentivized to utilize their time, which benefits the employer and the driver in return. Since truck drivers are paid for the miles they complete, they will improve their performance and output to complete a route in a more beneficial time. Skilled drivers will plan safe and effective routes without wanting to waste too much time.
This structure has been beneficial for both parties involved for many years, but the rise of technology favors hourly pay where the employer is concerned. As previously mentioned, hourly pay was usually associated with truck drivers who had shorter routes and adapted to a strict schedule. Still, electronic logging devices can now accurately track the behavior of all kinds of truck drivers.
Employers are looking for ways to utilize their employees to cover more distance, as they would have done if paid by the mile.
Different Types Of Mileage Pay
Since compensation per mile is the most popular method among employers, various ways are used based on the contracts created for the truckers. They are the following:
- Practical Mileage is the simplest and fastest route from any destination as calculated by the electronic logging device (ELD). The most efficient route is stored on the device, and drivers are paid for those number of miles.
- Household goods or zip code mileage refers to the distance of the nearest post offices in the respective drop-off and pick-up locations. The distance between the post offices of each location is used as opposed to each location individually.
- Hub mileage, also known as actual miles, refers to the difference between the numbers on the odometer before and after a trip which a driver is then compensated for.
Mileage pay is, by far, the most common way truck drivers are paid, and rates are often referred to as CPM, which stands for cents per mile.
Other General Methods Of Payment For Truck Drivers
Although compensation per mile is a preference for most drivers and employers, other methods can be more useful depending on the specialization and skills of truck drivers or the lack thereof. Other methods besides mileage pay include the following:
- Some professional and experienced truck drivers might receive a percentage of the load. This percentage can refer to the gross or net revenue of the delivered loads. This payment method is usually associated with valuable freight and is therefore among the highest type of pay in the industry.
- Some truck drivers prefer continuity and seek jobs that provide salaries. Whether they drive fewer distances or work more hours will not affect their agreed-upon compensation.
These forms of payment are quite uncommon and are usually part of a negotiated deal between the employer and the driver.
Special Forms Of Payment For Truck Drivers
Besides truckers being paid for their services, companies include certain forms of payment for different foreseen and unforeseen activities and truckers doing extra work. The following are different factors that are sometimes included in the “payment” of truck drivers:
- Per diem pay refers to truck drivers’ money as an allowance for food and rentals when they travel longer distances than usual. The money is often included in the paycheck but is non-taxable.
- Layover pay, also known as detention pay, is more common for drivers who wait to unload their freight at the final destinations. This prolonged waiting period is seen as an inconvenience, and truckers paid per mile usually receive this form of compensation.
- Truck drivers who have various stops between their pick-up and drop-off zones are also compensated with “stop pay” as these stops can be time-consuming.
- Some truckers even receive special hazard pay for driving in poor conditions like terrible roads and transporting hazardous materials like gas. Special incentive pay can be advantageous to truckers, but the employer often decides this amount without negotiations.
- Bonuses are also added payments similar to the incentive pay but are given to truckers for exemplary performance. Various companies even provide structured bonuses for safety and fuel expenses.
- Finally, accessorial pay refers to truckers performing above and beyond driving tasks. Accessorial pay is more common with truckers paid per mile than per hour and refers to jobs such as loading & unloading, operating forklifts, wrapping pallets, and many more.
Many different methods of payments exist that depend on the expertise and experience of the truck drivers as well as the main business delivery structure of a company. However, by far, the most common method is the payment per mile with added payments to compensate for inconveniences and extra work.