What miles should I use to pay my truck driver?
When computing miles for truck driver payroll, there are many ways to determine them. There are odometer miles on the truck, loaded miles, PC Miler practical miles, PC Miler short miles, google, air and others. So, with that many methods, which is the best way of determining miles for truck driver payroll?
Disclaimer: This article is meant to be a general overview of the different way to figure out miles. Consult your attorney before you make any decisions to ensure that you are following local laws.
First let’s go into detail on what each of these are
Odometer miles
Odometer miles, also called hub miles, are the odometer reading on the truck when they return minus the odometer reading on the truck when they left. It is easy to compute and pays the driver for each miles they ran. The problem is it also pays them to go out of route or take the truck home.
Loaded miles
Loaded miles pays the truck driver for all miles while the truck is loaded. It does not pay them or pays them a lesser rate when the truck is empty. Some trucking companies like this because they feel like the driver gets paid when the truck gets paid. One issue with this is the truck driver has no say in the deadhead or empty miles driven. If the trucking company does not pay anything for empty miles, you could run into minimum wage issues if the truck runs too long without freight.
PC Miler practical miles
PC Miler practical miles uses PC Miler’s software to determine the route’s mileage. Practical miles uses the reasonable route as determined by PC Miler. PC Miler short miles are the shortest legal route the truck can run. It’s usually 4-8% less than practical miles but that number can varies dramatically. A trucking company can use the routing software to calculate mileage with multiple stops so it is easy to determine the miles for a round trip. One trouble spot is when the driver has to reroute for construction or accidents or when the driver gets turned around and has to go back to a shipper or consignee. The latter case requires a new stop added where the driver turned around.
Google means google maps. I think we all know what this is but they are not great with truck routes.
Air miles
Air miles are as the crow flies or a straight line on a map from shipper to consignee. Please don’t use this method.
Now that we have talked about all these kinds of miles, how should you pay your truck drivers?
I prefer odometer miles as the driver knows what they are getting paid for at the end of the day. I would suggest not letting the driver get paid for taking the truck to their house without permission and I would monitor the miles paid versus the PC Miler routes so make sure my truck driver is doing what they are supposed to be doing but odometer pay is the fairest and easiest to understand.
That said, you may choose to use a different determination for paying miles. If you do choose another method, you need to explicitly tell the driver before they start working for you how you determine miles to pay. A sheet in the employee handbook that they sign for is a good idea here. It’s not worth saving a little by paying less miles if you get sued for failing to disclose it.
Written by Mike Ritzema
With over 20 years of experience in entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis, Mike has the breadth and depth of experience needed to quickly understand entrepreneurs’ businesses and craft the most suitable solutions.
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