Top 3 Benefits of Percentage Pay

How would you prefer to be paid? Higher of course; but that question was rhetorical. For typical over-the-road drivers or owner/operators, the two most common methods are either mileage pay, or percentage pay.

So what’s the difference? Consider this example:

A customer needs a commodity hauled 1,236 miles and will pay $2,900 for the load to be moved.

  • Mileage Pay is simply what it implies. You are paid a certain dollar amount per mile that you drive. For example, if you are paid 56 cents per mile and you drive 1,236 miles, your pay would look like this:

.56 cents x 1236 miles = $692

  • Percentage Pay is based off a percentage the shipper paid to haul their load. Using the example above, if your percentage is 28% and the shipper paid $2,900 dollars for the load, your pay would look like:

$2,900 x .28 = $812

Now that you know the difference, let’s dive into the Top 3 Benefits of Percentage Pay.

1. No More Mileage Disputes

Whether you’re a new driver or an experienced one, the last thing you want to do is dispute with your employer over whether or not your miles and compensation are fair. Percentage pay is a more transparent, fair pay system. If the owner/operator happens to be one of those who drive excessive extra distances to use their favorite roads, the company doesn’t have to pay for these inefficiencies. As well, periodically, a load paying full freight won’t use up the whole trailer. A percentage paid driver is more likely to be agreeable to the time spent filling the trailer, because more of the additional revenue goes to him.

2. Rates Are Increasing

Based on the industry’s current freight rates, company drivers average approximately $55,000 per year at the starting rate of 25% of the line haul revenue. The percentage pay rate amount for a driver increases, based on tenure and experience with a company. In addition, with the overwhelming demand for professional drivers, shipping rates are projected to continue to increase. According to the October 2017 Kiplinger Report, forecasted trucking rates will grow 5% – 10% in 2018.



3. Statistics Show – Percentage Drivers Are Happier

Truck drivers who receive pay based on a percentage split — a fixed percent of the invoice charged to customers — are generally more satisfied with their jobs than those who are paid based on hourly or mileage pay, according to survey results released by Stay Metrics.

Stay Metrics surveyed more than 4,000 drivers from 31 different carriers.

Drivers receive pay on a percentage split indicated they were 31% more satisfied with their jobs than those who receive hourly pay and 29% more satisfied than those who receive per-mile pay.

In the survey, drivers who receive hourly and per-mile pay said they felt underpaid compared to the responses of drivers who are paid on a percentage split.

PGT Trucking stands firmly behind our pay program, as we feel this is the best way to reward our dedicated drivers. Apply now and find out more!