My girlfriend has hired a man to run a truck for her and is paying on percent. She has her own authority. Right now she is paying the % of the total revenue, ie. Line Haul + Fuel Surcharge. My opinion is that she should be paying the % of Line Haul - Broker's Commission and that the Fuel Surcharge should not have any impact on the driver's pay.

She should not be including the FSC in the percentage pay, if she owns the truck. If the man she hired owns the truck, he should be getting 100% of the FSC.

If it were me, I would pay % of the linehaul - FSC.

Who does the "Broker's Commission" go to? If it goes to your girlfriend, then that would be double dipping. Likely, any expense should be coming out of her percentage.

Also, what sort of taxes is she withholding? Does she have an EIN? Does she have a contract with the driver?

The broker's commission is actually now a moot point, she used to lease to another company and they charged a percentage. She went to the IRS yesterday and got the payroll stuff, was paying contract and got told by a certain governmental agency (luckily no fine) that she had to pay wages and withhold taxes.

Most of us who pay percentage do not include the fsc. That goes to the truck. I don't know of anyone who pays on the fsc. If the driver has control over where he runs and basically decides which loads he takes, then he can be considered an independent contractor and could be held responsible for his own taxes. It is a fine line with the IRS. I have spoken with them at length about the difference between classifying a driver as an employee or independent contractor. If she plans on paying him as a independent contractor she should have him sign an agreement where he understands that he is responsible for his own taxes and defines what he is to be paid and responsibilities of both parties. If she books the loads and the driver is basically under forced dispatch, then he is considered an employee, regardless of any document he signs, and she could be held liable for any taxes. Trucking is given some leeway in differentiating between an employee and independent contractor.

Thanks Gman, yep, she does the dispatching and pretty well keeps him busy. Every once in awhile he wins out and comes home when she wants him to take one more but he is an employee. I think we got it straight now. When she was leased to a leasing company she was paying 30% commission to the leasing company then paying the driver 27% of the Line Haul + the fuel surcharge BEFORE the commission was taken out. No wonder she wasn't making any money!!!

FSC always goes to the truck.

as an independant contractor i get paid 25 % of the gross of the load. my boss hands me the sheets for everything he was paid and i do all the math and figure out what i am owed. he will then go back over to make sure i didnt mess something up.