Truck drivers have several overhead costs to consider, such as fuel, maintenance, food, and lodging. However, there are ways to offset these costs and recover non-taxable reimbursements for these expenses.
Truck drivers are responsible for paying for their own gas if they are owner-operators, but most trucking companies have tools in place to cover the costs of fuel for their drivers. Keep reading as we discuss various ways by which these costs are handled by trucking companies as well as the options that exist for owner-operators in terms of lowering their expenses.
How Much Do Truck Drivers Spend on Gas?
According to Yahoo Finance News, due to the ever-increasing diesel fuel prices, truck drivers spend an average of $2,400 per week on gas alone. The average diesel gasoline prices are currently over $5 per gallon, and with tanks capable of holding 250 gallons each, the cost adds up very quickly.
Do Trucking Companies Pay For Fuel?
If the driver is an owner-operator, then he or she will need to pay for their own fuel. The owner of the trucking company typically pays for fuel by issuing an upfront fuel contract, a fuel card, surcharge, a freight factoring company, or a reimbursement to offset the costs of fuel. Let’s take a deeper look at how companies pay for fuel.
A fuel card is a credit card intended to be used for the purchase of gasoline and various other services. Fuel cards are typically issued by companies that want to help drivers pay for fuel. Fuel cards are essentially a partnership between fuel stations and truckers to help drive sales.
Truckers are incentivized by fuel discounts, which they receive from their fuel card providers. If a driver’s fuel card fails to work, he or she should check the PIN, the fuel limits, and the location to ensure that the driver is within the fuel card’s network.
A fuel surcharge is a fee added by third parties and trucking companies to account for the fluctuation of fuel costs. The surcharge is a calculated percentage of the national fuel rate, and it is normally added to the freight bill of the shipping company to help cover operational costs.
A fuel contract is an agreement between the trucking company and the fuel provider, designed to avoid the price fluctuation of fuel. A fuel contract allows you to purchase a specified amount of fuel for a fixed price, which allows trucking companies to save on fuel costs for their drivers. Companies can provide cash or a fuel card for their drivers, or they may choose to issue a reimbursement with their pay.
Freight Factoring Company
A freight factoring company is designed to handle back office and logistical duties associated with shipping, which can streamline cash flow instead of hiring people to handle your accounts receivable internally. Trucking companies use this cash flow to pay for trucker’s fuel from immediately-paid invoices as opposed to waiting 30 days or longer to get paid.
Other Expenses Trucking Companies Pay for
In addition to fuel, trucking companies will sometimes offer a non-taxable per diem to offset the costs of expenses away from home such as food and lodging. Some trucking companies may also pay for training for their drivers, as well.
Per diem is a daily amount of usually, non-taxable reimbursement, which is capped daily by the IRS. It’s designed to help offset the costs of fuel, food, and lodging expenses that truck drivers incur. These can then be deducted from your annual taxable income.
Hotels and Lodging
Trucking companies typically do not pay for hotels unless you are in a situation where your truck is broken down for an extended period. To offset the costs of lodging, trucking companies will often issue a standard per diem so that the driver can be reimbursed for their hotel expenses.
Truck Drivers Can Offset Expenses To Maximize Profits
Trucking companies can help to offset the costs of expenses for their drivers by using per diem, fuel cards, fuel contracts, and other incentives to help make their drivers happy. Independent truckers must take on the burden of operational expenses themselves, however, they can minimize the cost of fuel by taking advantage of fuel cards, IRS per diem rates, and tax deductions.
The WEX Fleet Crossroads Card is the most widely used gas card by truckers due to its acceptance at 95% of fuel stations and over 45,000 service stations nationwide.
Most trucking companies provide a daily per diem to help offset the costs of food and other expenses. The IRS reimburses up to the standard daily rate of $69.
18 wheelers can have one or two tanks holding 100-150 gallons of fuel. Based on current diesel gas prices, it can cost between $550 – $1650 depending on how many gallons your truck holds.