Over the Road April 2024

1189694

Publisher Peter Charboneau peter@otrgroup.ca

Director of Operations & Editor-in-Chief Cathryn Charboneau cathryn@otrgroup.ca

Account Executive

Luke Zentil luke@otrgroup.ca

Account Executive Earle Madden earle@otrgroup.ca

Graphic Design & Advertising lennykuiper.com

lennykuiper@gmail.com

Controller Estela Navarrete estela@otrgroup.ca

Office Manager

Mary Charboneau mary@otrgroup.ca

TRANSX EASTERN TRUCK LOAD

> Montreal Corridor (Canada Only)

> East Coast (NY/NJ)

> Open Board (1-2 days out)

> Long Haul (California/Midwest Triangle)

TRANSX OFFERS:

> Excellent fuel subsidy program

> Paid

>

> Other

Robert D. Scheper

Who Makes More Money? Driver or Operator?

A super highly contested topic such as the earning differences between a Driver or Operator is eventually on the mind of every driver in trucking. Usually, within a year or two of being a company driver, comparisons begin to formulate in their minds.

Canada Revenue Agency does separate Drivers from Operators (self-employed) officially, but their records do state that there is little to no significant difference. In my research for my 2015 book “Making Your Miles Count: Choosing a Trucking Company”, I also found no statistically significant difference between the two categories unless one or two features were present. The first is, does the Operator have their truck paid for? It didn’t make any difference whether the data was from 1996 or 2012, the results remained the same. There is no significant taxable income differential until the major asset (truck) is paid for. Once paid for, either the lease payments were not there to reduce income or the depreciation on the vehicle was minimal due to the time/cost reduction in expenses. However, once the truck was paid for, the income dramatically increased by $20-30K on average. The return on investment of a paid for truck is the first REAL value in the operator industry. Very few notable exceptions are available.

The Second feature that changes the earnings difference between Company Drivers and Operators is in the application of non-taxable benefits (NTB) to the taxable income. Using NTB produces an approximate 75% reduction in income tax ($16,000 down to $4000) or $12,000-$12,500 annually.

So, if everything else remains the same, an Operator has $12,000 higher AFTER TAX CASH FLOW than does a Company Driver. It has nothing to do with equipment or driving ability, it is simply an added tax advantage provided to an Operator. That’s the good news!

The bad news is that less than 3% of all Operators in Canada use NTB. If you are reading this and you submitted a TL2 Simplified Form to your accountant or provided him the “days on the road in Canada and the days on the road in the USA”, you are NOT using NTB. The Canadian tax laws do not allow you to use both the TL2 simplified form/figure and the Non-Taxable Benefit figures at the same time. That’s called double dipping. Well over 96% of all Operators in Canada are asked by their tax preparers to use the TL2 simplified method to complete their returns.

In 2007 when my first book was published it presented the entire argument AGAINST using the TL2 in favor of the Non-Taxable Benefit system. It’s amazing that after 18 years, accountants across Canada still do not know about it, or do not care to save their clients the taxes. I’m sorry for being this harsh but after 18 years I’ve now assumed accountants will NEVER use it unless an Operator demands it.

Accountants refuse to invest time, effort, and research into the system because (quite frankly) to a tax preparer the Independent Operator Industry is low paying freight. The industry isn’t worth ‘investing time & effort into’. So, they simply do what they have always done… the TL2 simplified method.

Making Your Miles Count has kept track of our collective savings and as of March 2024, it just passed $71 million dollars in tax savings for Operators.

The system does have serious disadvantages (especially to tax preparers); it is more detailed work monthly and requires a level of defence to CRA that is specific to the system itself. Linking the ELD’s with NTB is just the beginning. Collecting ITC’s from NTB will also be a required defence. The list of details is quite lengthy for the tax preparer but HIGHLY beneficial to the Operator.

It is my opinion, to adequately service the Independent Operator industry, technological innovation is an absolute necessity. Making Your Miles Count has invested in specific technology now for well over 5 years and it has simplified a very

complex system into something the average operator (and tax preparer) can easily use and comply with. MYMC guarantees the filing of NTB to $50K, something no other firm does. To me… it’s a no-brainer.

These are just a couple issues important to Independent Operator’s success. Our MYMC PODCAST produces a wide range of different topics for the industry to consider. My team and I have a booth (2287) at the Truck World 2024 event in Toronto April 18-20th. Come on down, let’s talk for a while. Contact us and we can get you into the show with a free pass.

If you can’t make it, please still reach out, I’d love to talk to you about creating after-tax wealth in your life and career.

About the Author:

Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars. You can find him at www.makingyourmilescount.com or 1-877-987-9787.

CHECK OUT THE PODCASTS AT “YOUTUBE.COM/@MAKING YOUR MILES COUNT”

Chris Harris

Suffering From Detention Time?

Hey there, fellow truckers! Safety Dawg here and I’ve got a truckload of thoughts to share with you today about detention time. It is one of the most absurd things in our industry; the idea that truck drivers should wait up to two hours without getting paid for their time. Seriously, who came up with that nonsense? And for those rare companies that do invoice after the truck and driver waited 2 hours, how often do you receive that money?

It’s time to put an end to this unpaid waiting game once and for all. We can’t just change it; we need to chuck it out the window and never look back. And let’s ditch the term ‘detention time’ while we’re at it. It’s just a fancy way of saying “we’re going to make you sit around and twiddle your thumbs while we figure out what to do”.

Think about it – as truckers, we meticulously plan our routes, calculate our hours, and expect to be compensated for every minute we’re on duty. But time and time again, dispatchers forget to include waiting time into their calculations. They want

the truck to arrive on time, get unloaded quickly, and move on to the next job. But let’s be real – how often does that happen? How many hours do you sacrifice and not get paid? The fact is, you are away from home, spending time away from your family and not getting paid for sitting in a warehouse dock.

And let’s not forget about the next generation of truckers. How are we supposed to entice them to join our ranks when we’re basically saying, “Hey, come drive for us and enjoy hours of unpaid work”? It’s madness, I tell you.

If we want to attract quality drivers, we need to pay them fairly. That means a decent hourly wage and compensation for every minute they are on duty. Vehicle inspections, loading, unloading – you name it, they should get paid for it.

And let’s not buy into the nonsense that some companies spew about mileage rates covering detention time. That’s just a load of horse crap. If we want to see real change in our industry, we need to demand it. Trucking company owners need to stand up to the shippers and

demand fair treatment for their drivers. If a truck isn’t offloaded within 20 minutes, detention time should start – no ifs, ands, or buts.

Let’s face it, folks. Being a truck driver is simple; make your deliveries on time and damage-free. That’s what you get paid for. Sitting around in a loading dock for hours on end? That’s just plain unfair.

But here’s the thing – it’s not just unfair to the drivers; it’s bad for business too. Think about it – an owner of a truck spends a gazillion dollars on a tractor and trailer only to have it sit for hours at a time in a loading dock unpaid? And for many trucking owners, if they’re not getting paid, then they’re not paying their drivers either. It’s a terrible situation, and it’s a surefire way to cause truck driver turnover.

And let’s not forget about the toll it takes on drivers. Sitting for hours in the boring cab of a truck with nothing to do is not only frustrating – it’s downright soul-crushing. We need to treat our drivers better, plain, and simple.

So, what’s the solution? It’s simple – we need to demand fair treatment for our drivers. We need to stand up to the shippers and demand detention time. If a truck isn’t offloaded within 20 minutes, paid detention time should start – no exceptions.

And let’s not forget about the importance of transparency. Trucking companies need to be upfront with their drivers about their pay structure and make sure they’re getting compensated fairly for their time.

In conclusion, it’s time to put an end to the unpaid waiting game once and for all. We need to demand fair treatment for our drivers and ensure that they’re getting compensated fairly for their time. After all, they’re the backbone of our industry, and it’s time we started treating them as such.

Stay safe.

Chris Harris Top Dawg, Safety Dawg Inc. 905-973-7056

chris@safetydawg.com

@safety_dawg (twitter)