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![Types of Truck Driver Pay [7 Pay Structures Explained]](https://blog.drive4ats.com/hubfs/HoldingUpMoneyFeatured.png)
Why did you become a truck driver?
If you are like a majority of truck drivers, you did it for the pay. And while the reason you got into the industry isn’t solely because of pay (perhaps you enjoy the freedom of the road or you grew up with family members in the trucking industry), it’s likely at least one of your top reasons for staying.
Over-the-road (OTR) trucking is one of the highest-paying trucking gigs you can get. Now that you’ve landed a job with the trucking carrier of your choice, you need to figure out all the different ways you can get paid — especially because, in some cases, you can choose your pay structure.
If you don’t understand the difference between payment types like cents-per-mile (CPM) and percentage pay, you may not choose the payment structure that will maximize your income based on your running style.
As the operations support manager here at Anderson Trucking Service (ATS), I crunch numbers and look at settlement checks all day. I’ve been in this role for 11 years, so I have a good grasp on how the industry has changed over the years, and subsequently, the pay structure.
In this article, you'll learn about the different types of truck driver pay. This will help you feel confident about choosing how you're paid. It'll also help you understand your settlement checks a little better.
But first, I’ll explain the difference between the pay structures for company drivers and independent contractors.
How Do Company Truck Drivers Get Paid?
Company drivers can be paid on a CPM basis or by percentage pay. Company drivers at high-paying carriers typically earn upwards of $100,000 per year.
Within company driver pay, there can be options for per diem. I’ll discuss this further, but per diem pay is non-taxed funds that pay for things like laundry, new uniforms and other things drivers may need over the road.
As long as you turn in your paperwork on time, you should receive a settlement check every week.
How Do Independent Contractors Get Paid?
Independent contractors can be paid by percentage pay or on a CPM basis. After fixed expenses, independent contractors can earn more than $140,000 per year.
Contractors are paid on a different time scale than company drivers. Each company is different, but because drivers are independent contractors, they can be paid every 24 hours, every 48 hours, weekly or biweekly. Be sure you ask your trucking carrier how often you’ll be paid.
Related: How much do OTR drivers make?
7 Types of Truck Driver Pay
As a driver, you can be paid in any of the following ways:
Cents-Per-Mile (CPM)
Cents-per-mile (CPM) pay means that you're paid for each authorized mile you run. Currently, the market range is about 50 CPM. To give you an idea of how that calculates out, if you ran 400 miles in one day, you could roughly count on earning around $200 that day — not including detention or stop pay.
Company drivers receive CPM for both empty and loaded miles as long as they're authorized miles.
The CPM range you’ll be paid is dependent upon the company you work for, your trucking experience and your safety record. It may also depend upon how large of a load you can haul, so the more endorsements and experience under your belt, the better.
CPM is a more stable form of payment as compared to percentage pay, which depends largely on the fluctuating cost of freight.
Percentage Pay
Percentage pay is based on what is being billed to the customer. The driver is owed a percentage of anything the carrier bills to the customer and the customer pays out.
Percentage pay includes the line haul cost (the cost of getting from point A to B). It can also include stop charges and special equipment charges. Special equipment charges include things like tarping a load.
Just like with CPM pay, the percentage you're paid is dependent upon the carrier, their safety score and their customers. Reputable, sought-after carriers may have access to the highest-paying freight and customers.
When you’re paid by percentage, your income can ebb and flow with the market. If freight rates are low, being paid by a percentage of the line haul cost might result in lower paychecks. When freight rates are high, you'll see higher paychecks. There isn’t that safety net that there is with CPM pay.
Per Diem Pay
Drivers may have the option to elect or opt out of per diem pay. This Internal Revenue Service (IRS) item allows fewer taxes to be withheld so drivers get more take-home pay to cover expenses on the road. Expenses include meals, uniforms and other supplies drivers need to complete their job.
Independent contractors aren't usually eligible for per diem, but they can submit their receipts during tax time to receive a potential tax deduction for expenses paid while out on the road that year.
Stop Pay
Drivers earn stop pay when they have to stop at another facility on their way to a load’s final destination. This happens if a driver has to stop somewhere in between pickup at the origin or the final drop at the destination to pick up an additional load or more equipment.
Consider a scenario where you’re loading out of a Minnesota warehouse and your final destination is in Texas. If you have to stop in Kansas to pick up more equipment, that's considered a stop and you would be paid for this. The rate of pay depends on the customer.
Detention Pay
Detention pay is paid out any time a customer holds up a truck or causes an unknown delay for you as the driver.
This may happen if you're waiting to get loaded at a facility because the item(s) happen to not be ready to load, or the loading crew is not available to load the item(s) onto or into the trailer.
Detention pay can be charged not just during loading and offloading at your origin and final destination, but during your stops too.
The trucking carrier typically bills the customer per hour for detention. If the customer elects to pay the detention fee (sometimes they don’t), that money or a percentage of the funds received is paid out to you.
The price paid out for detention pay is on a case-by-case basis. Sometimes you'll be required to adhere to a specific appointment or timeframe to pick-up or drop-off. If you don’t hit that deadline, you're not subject to detention pay.
Accessorial Pay
Accessorial pay is any other charge that fits within an order that isn’t line haul pay. There's a long list of things carriers can charge the customer for, from tarping and tolls to unloading and loading fees.
Detention and stop pay can be categorized under the accessorial pay category.
Bonus Pay
Every carrier has a different bonus structure, so it’s important to ask your recruiter about it. You may be offered sign-on bonuses, referral bonuses, bonuses after you complete a lease term or bonuses after earning special certifications or endorsements.
Which Pay Program Should I Choose?
As a truck driver, you won’t necessarily get a steady pay rate and see the same number on every settlement check. Your income will depend on how many miles you drive and/or the cost of the freight you’re hauling.
Sometimes companies have both CPM and percentage pay programs and you can pick which program you’d like. You should receive the program details in writing so that you can make an informed decision.
Sometimes there is only one payment structure choice or you are required to go with a specific choice based on whether you are a contractor or company driver.
Keep in mind that if there are two payment program options, you should be able to switch if you don’t feel successful with one program. This doesn’t mean that you can switch back and forth between payment programs when the freight market changes, but if you do feel you need to make a change, you should get that option.
Talk to your carrier about what your revenue could look like on each pay program and together you can decide if a switch is the best move.
When you choose CPM versus percentage, consider how many miles you run. Do you run a lot of miles? If so, you should choose CPM to maximize your income. If you run low miles, choose percentage pay.
If you're an independent contractor, you have more choice about which loads you haul. You can speak with your dispatcher about which loads to take to make you more profitable. It isn’t always about taking one load that has a huge payout. You also have to factor in whether or not you can get a load out of that area or if you’ll be stuck waiting for freight.
Make More Money at ATS
When you're determining whether you’d like to try out the CPM program or percentage pay, make sure you talk to your carrier about transparency. Your trucking carrier should be transparent about pay. You should have access to freight bills (the bill that's sent to the customer). That way, you can see exactly what the customer is being billed for and what you're subsequently being paid.
Once you do start with a carrier, look closely at your settlement statements and checks. It should detail everything you're being paid for. If you're confused about a settlement check, call your carrier. The financial department should be able to break everything down for you and explain it clearly.
This article will also help you understand your settlements better.
ATS is proud to offer a variety of pay structures for company drivers and independent contractors.
To learn more about our pay structures, visit our pay page or fill out an application to talk to a driver consultant.