Driver’s Payroll – Gross wages paid to the driver of a Motor Vehicle and the related company payroll tax expense.
Driver’s Benefits – Company provided incentives other than wages. Examples include health insurance and retirement contributions.
What expenses do you have with driver’s payroll & benefits?
* DRIVER’S GROSS PAYROLL EXPENSE
* PAYROLL TAX EXPENSE
* WORKERS COMPENSATION EXPENSE
* DRIVER’S HEALTH INSURANCE EXPENSE
* RETIREMENT EXPENSE
What Types of Cost Are These? These are typically Movement Costs.
IMPORTANT MESSAGE FOR OWNER OPERATORS
As the owner and driver, you started your business with the intention of making money. Although you may not cut yourself a paycheck, you must factor in a MINIMUM expected pay for your work.
Remember as the owner you keep all profits. You want to include a minimum gross payroll amount (paid or not) in determining your Cost Per Mile or Cost Per Hour.
YOU DO NOT WANT TO CALCULATE A COST PER MILE OR COST PER HOUR THAT DOES NOT INCLUDE DRIVER PAY!!!
Learn Cost Reduction Tips
GROSS PAYROLL EXPENSE – Although this is a step that you as an employer may not want to take, realize that you must manage your business based on the current economic environment. If freight rates decline you may not be able to afford to pay your driver his or her current pay rate.
When discussing a pay cut to your driver it is important to explain why the pay cut is necessary for the survival of your business. It does not benefit your business to pay any employee more than you can afford. When you use our costing method it will be easy to see the effect of the lower pay rate.
This concept applies to owner operators as well. Our costing method does not require actually writing yourself a check but does require an owner operator to include a minimum mileage or hourly rate for his or her work.
Helpful Tip: Inform your employees or leased owner operators that you will increase the rates back to original amounts once the economy recovers.