Gross vs. Net Income in Trucking

Ever been told what you’ll be taking home each week by a recruiter only to find out they were lying? 

Well, some recruiters may fudge the truth just to get you in the door and meet their “quota.” (Which is not okay.) BUT, there’s also a chance you were both just speaking different languages. They might have been quoting gross income averages, while you may have been thinking about your net income.

Imagine accepting a job on false pretenses regarding how much money you’ll earn. The result could potentially mean devastating financial consequences for you and your family.

Everyone could use a little help developing their financial literacy, so let’s dive in further and define these terms: gross income and net income. That way, you never have to be confused again when talking to a recruiter about expected pay averages or talking to your driver manager about your weekly settlements. 

As an operations support manager, you’ll often hear me on the phone with drivers explaining this topic to our fleet of drivers at Anderson Trucking Service (ATS). I’m here to explain it to you, too. 

To make the terms easier to understand and apply to your situation, I’ll break down gross and net pay as it applies specifically to company drivers and then independent contractors. You’ll be empowered with the financial knowledge you need to succeed in this business. 

Company Drivers: Gross vs. Net Pay

Gross pay is the amount company drivers (employees) earn before any deductions come out of their paychecks. Gross pay is 100 percent of your wages, reimbursements and/or bonuses earned within a specific period. 

Deductions can include taxes (federal and/or state), your benefits (health, dental, vision, disability, etc.), your retirement accounts (like a 401k) and levies, garnishments or court-ordered child support. Levies or garnishments can include fees from a civil case, a court order, back taxes, back child support and more. 

Net pay is your pay after all your deductions are taken out. It’s the amount of your paycheck or settlement that’s sent to your bank or written out to you in check form. It’s also referred to as take-home pay.

Trucking companies are responsible for taking the deductions out of your gross pay, so you don’t have to pay taxes separately. 

Every driver has different deductions that depend upon their unique personal situation. One driver may have to pay more for health insurance because they have a big family. One driver may need to pay child support. 

Oftentimes, drivers blame carriers for what they perceive as low pay. While there’s certainly a chance the carrier isn’t paying well, you do also have to consider what’s being taken out of your check. If you have back taxes taken out of your check or child support, it can take a big cut out of your check. 

Your trucking company can’t control your deductions, and if you go to a different carrier, you’ll still have to worry about those deductions. Make sure you understand what your deductions will be so you can plan accordingly.

Related: How much do truck drivers make?

Independent Contractors: Gross vs. Net Pay

For independent contractors, gross pay is 100 percent of the earnings you make on the loads you haul in a particular timeline. 

Net pay is your pay after your deductions have been subtracted. However, the deductions aren’t the same ones you’ll see as a company driver. 

The carrier you drive for isn’t obligated to withhold federal or state taxes from your settlement statement. They don’t withhold Social Security Service payments either. Independent contractors are responsible for filing these documents during tax season. Similarly, independent contractors don’t qualify for company-sponsored benefits because they’re not classified as employees. 

So, while independent contractors have deductions, they’re very different from company drivers. Instead, the expenses deducted from an independent contractor’s pay include fuel, truck payments, a maintenance account, a savings or reserve account and advances. 

Making Pay Expectations Clear

When you’re talking to your driver manager or a recruiter about pay, make sure you’re speaking the same language. In conversations, explain that you’re referring to net or gross pay. Reconfirm that your recruiter or driver manager is referencing the same number. 

I see it happen far too often: The driver is speaking in terms of net pay and the recruiter is talking about gross pay. It gets incredibly confusing — not to mention frustrating, especially if you quit your trucking job to reap the (misunderstood) financial benefits of another company. 

Be explicit when asking about the deductions that’ll be taken out of your paycheck — especially if you’re an independent contractor. When your recruiter is talking about expenses, find out whether they’re giving you an estimate of average costs or if they have more of an exact number. Their averages may not apply to you, so see if they can estimate the cost of expenses for your unique situation. 

When talking to your driver manager, consider that company drivers’ net pay is confidential, as is pay for in-house employees. It’s required to keep this confidential due to the garnishments and levies that may be deducted from your gross pay. Gross pay, however, is visible to certain team members that work directly with you to help make you successful, such as your driver manager. 

Ways to Get Paid as Truck Driver

Understanding gross versus net income in trucking is crucial for drivers, whether they’re company employees or independent contractors. Gross pay refers to the total earnings before any deductions are taken out, including taxes, benefits, retirement contributions and other expenses. On the other hand, net pay represents the actual amount received after all deductions have been subtracted.

To avoid confusion and miscommunication, it's essential to clarify whether you’re discussing gross or net pay when talking to recruiters or driver managers. Being explicit about deductions, especially as an independent contractor, helps drivers have a clear understanding of their actual take-home pay and enables them to make informed decisions about their finances and career choices.

To continue to boost your financial literacy in the trucking industry, learn more about the different ways truck drivers are paid.