How to build a driver settlement statement drivers can check line by line

What a settlement statement is for

A settlement statement is the document that shows a driver how their pay for a period was worked out. For a company driver it sits beside the payroll run. For an owner-operator it is the settlement under the lease: the money the carrier owes for the loads hauled, less the costs the owner-operator agreed the carrier could take back.

Most driver pay disputes are not about the rate. They are about a load that was missed, a detention charge that never made it onto the statement, or a deduction nobody explained. A statement that lists each load, each extra and each deduction, with a short description and an amount, answers those questions before the phone rings.

The rules behind it differ by who the driver is. In Canada, a company driver is an employee, and employment standards control what can come off their pay. An owner-operator runs a business, and the lease or contract controls the settlement. The CRA looks at the whole working relationship, not just the label in the contract, when it decides which one a worker is, so the way you pay someone should match how they actually work.

Pay methods: pick one and write it down

Trucking uses four common pay methods, and many fleets mix them. Whichever you use, write the rate and the rule into the driver’s offer letter or the owner-operator’s lease before the first trip.

• Per mile (or per kilometre). The most common method for company drivers. Say which miles count: practical miles from a routing tool, hub miles from the odometer, or loaded miles only. Say whether empty miles pay the same rate.
• Percentage of revenue. The usual method for owner-operators. Say whether the percentage applies to linehaul only or to the whole invoice, and how fuel surcharge and accessorials are split.
• Hourly. Common for local, yard and drayage work where miles say little about effort. You need reliable start and end times.
• Flat per load or per day. Simple for dedicated runs and shuttles that repeat. Say what happens when a run is cancelled or takes much longer than planned.

In the United States, the federal leasing rules for owner-operators say the compensation must be stated in the lease or an attached addendum, and allow a percentage of gross revenue, a flat rate per mile, a variable rate by direction or commodity, or any other method both parties agree on. When pay is a percentage of revenue, the carrier must give the owner-operator a copy of the rated freight bill, or equivalent documentation, before or at the time of settlement.

For company drivers on per-mile pay, track hours as well. Canadian federal labour standards set a standard of 60 hours a week for highway drivers employed by a federally regulated carrier, with overtime after that. Check the regulations for how this applies to mileage pay.

Accessorial pay and reimbursements

Accessorial pay is money the driver earns on top of the base rate for extra work: detention, layover, extra stops, tarping, driver assist, border crossings, breakdown time. Put each one on its own line with the load number and the reason, for example "Detention at consignee, load 1047, 2 hours after 2 free". If you pay a driver detention only when the customer pays you, say so in writing, because the driver will otherwise expect it when they record the time.

Reimbursements are different. They pay back money the driver spent on the carrier’s behalf, such as a lumper fee, a scale ticket, a wash-out or a toll paid in cash. Pay them from the receipt, at the receipt amount, and keep them separate from earnings so the statement shows what is pay and what is money returned. Ask your accountant how a specific item should be treated in payroll.

For owner-operators, decide in the lease which accessorials pass through in full and which are split at the same percentage as linehaul. Fuel surcharge is the item most often argued about: many leases pass it through in full because the owner-operator buys the fuel.

Deductions, chargebacks, advances and escrow

Deductions are where a settlement statement either earns trust or loses it. Each one should name the item, the amount and the document behind it.

Company drivers

Under the Canada Labour Code, an employer may deduct from wages only what the Code allows: amounts required by federal or provincial law, such as income tax, CPP and EI, amounts ordered by a court or set by a collective agreement, amounts the employee has authorized in writing, and overpayments of wages. A written authorization must set out the amount, the purpose and how often. A deduction for damaged property is not allowed under a written authorization if anyone else had access to it. Carriers whose trucks stay inside one province follow that province’s employment standards, which set their own rules on deductions.

An advance to an employee, such as cash for a load, is recovered from a later pay. Because the Code limits deductions, get the driver’s written authorization for the recovery when you give the advance. Record the advance when you give it, show the recovery as its own line, and keep a running balance so the driver can see what is still owed.

Owner-operators

For owner-operators, deductions are chargebacks: costs the carrier paid first and recovers at settlement, such as fuel bought on the carrier’s card, trailer rental, insurance, plates and permits, ELD fees and cash advances. The US leasing rules require the lease to list every chargeback item and how each amount is calculated, and to give the owner-operator the documents needed to check the charge. That is good practice in Canada too.

Escrow is money held back from settlements as security, usually until it reaches an agreed balance. Under the US rules, a lease that requires escrow must state the amount, the items it can be applied to, and the conditions for getting it back. The carrier must show each escrow deduction or addition on the settlement sheet or in a separate monthly accounting, pay interest on the fund at least quarterly, and return it no later than 45 days after the lease ends. Show the escrow line and the running escrow balance on every statement either way.

A worked example: one week for an owner-operator

This owner-operator is paid 72% of linehaul, with fuel surcharge and agreed accessorials passed through in full. Fuel was bought on the carrier’s card. The lease lists trailer rental, insurance, ELD and plate fees as chargebacks, and requires escrow contributions until an agreed balance is reached. Figures are in your billing currency.

Two things make this statement easy to check. Each load shows the linehaul it was paid on, so the owner-operator can compare it with the rated freight bill. Each deduction names its source, so the fuel line can be matched to the card transactions and the advance to the day it was given. Add the escrow balance after this week’s contribution below the table.

A company driver’s statement has the same shape with different lines. For example: 2,450 miles at 0.62 per mile is 1,519.00, plus two extra stops at 50.00 each and two hours of detention at 25.00 an hour, for gross pay of 1,669.00. Payroll source deductions come off next, then any authorized deductions, then the receipt reimbursements are added back to reach net pay.

Pay periods, timing and records

Choose a pay period, weekly or every two weeks is common, and a cut-off rule: which loads belong in the period. Delivered by the cut-off and paperwork received is the simplest rule. Under federal labour standards, employees must be paid on the regular payday you set. In the US, the leasing rules require payment to an owner-operator within 15 days after they submit the delivery documents for a trip, and limit those documents to the logs and the paperwork the carrier needs to get paid by the shipper.

Under section 254 of the Canada Labour Code, every time a federally regulated employer pays wages it must give the employee a written statement of the pay period, the hours paid, the rate, the details of every deduction and the actual amount received. A good settlement statement covers all of that.

Keep the statements and what is behind them: rate confirmations, delivery documents, fuel receipts, advance records and signed deduction authorizations. Federal labour standards require payroll records for each employee, including pay and deductions made each payday, to be kept at least 36 months, and another 36 months after employment ends. The CRA generally expects business records to be kept six years from the end of the last tax year they relate to.

How TruckerPro Finance handles it

In TruckerPro Finance, a settlement starts from the loads the driver delivered in the period, so the miles, loads and rates on the statement are the ones recorded on each load. Pay terms can be per mile, a percentage, hourly, flat or per trip, or per day. Each settlement produces a pay statement that lists every load and every deduction, and you review and approve it before it is final.

Advances are recorded against the driver with a running balance, and the outstanding amount is recovered when the next settlement is approved. Settlements, pay statements and advances are on every plan, Starter included.

Owner-operator statements with recurring deductions and fuel chargebacks start on Essentials. Truck and trailer rental, insurance, ELD fees and other recurring charges come off on a schedule you set, fuel bought on your cards is charged back from the same fuel data you use for IFTA, and escrow is held from each statement with its own ledger and balance. Contractor pay and QuickPay are on Essentials too. On Plus, drivers’ expenses can be recorded from a photo of the receipt.

TruckerPro calculates and records pay; it does not pay drivers. You pay by cheque or through your bank, or on Plus create CPA-005 files for contractor pay runs and upload them to your Canadian bank. Payroll source deductions for employee drivers are on the Advanced plan. Compare the plans to see what each one adds.