What is Better Mileage or Percentage Pay?
So you are a truck driver or perhaps a freight transportation engineer and are curious whether you should find a trucking job that pays mileage or percentage. It does not matter if you are an owner operator or a company driver, this is still a valid question.
We are not going to touch on other things like benefits, time out or routes. All of those things make a difference when choosing the trucking company that is right for you, however today is just about mileage or percentage pay.
We will start with the simple answer and the one we all love, IT DEPENDS.
Mileage pay is easier to predict, all you need to know is the miles, right?
Not quite. First of all you need to know if the miles you are paid for as a truck driver are all miles, loaded and empty, or just loaded. You also need to know the rate per mile you are being paid and if you are paid differently on loaded miles as opposed to empty miles. The next thing you need to know is how the miles are calculated. Are they odometer miles (or hub miles) which is the best way or are you paid on computer miles. If the trucking company is using computer miles you need to know if they are short or practical miles.
The best way for miles to be calculated for your pay is odometer or hub miles. The worst way is short computer miles.
Once you have all that settled you need to know how many miles you can expect a week.
Now, on to percentage pay. Typically if you are working for a trucking company that pays you a percentage then you will only be paid while you are loaded or under dispatch. At many trucking companies the amount each load pays can vary greatly so it can be difficult to determine how much your checks will be week to week unless you have a dedicated run.
If your company pays percentage the main thing you need to know is what the percentage is and what it is based on. Most companies pay company truck drivers a percentage of the line haul and none of the fuel surcharge (if there is one) For owner operators they usually get a percentage of the line haul and all (or almost all) of the fuel surcharge.
You really have to evaluate the pay for each company based on the type of freight the company hauls, what the pay is (mileage or percentage) and the length of haul.
There are a couple rules that you can usually use, although you still need to do the calculations yourself.
You are normally better being paid based on percentage if you run short freight.
It is not uncommon for you to make more on mileage pay if you are pulling a dry van.
If the trucking company tells you there will be a lot of dead head between loads you might be better off on mileage pay. The exception to this might be oversize loads which tend to pay very well but have a lot of dead head.
Here are a couple of quick calculations to let you know how the numbers work.
If you do a run that covers 400 miles (325 loaded) and your company pays $.30 per all miles then your pay would be $120.00
To make this much if you were being paid 25% then the line haul would have to be $480.00 on this load.
If you do a run that covers 800 miles (700 loaded) and your company pays $0.90 per all miles then your pay would be $720.00.
To make this much if you were being paid 75% then the line haul would have to be $960.00 on this load.
Sometimes deciding between a trucking company that pays mileage versus one that pays percentage can be a difficult decision. You have to look at everything as a whole.