A percentage pay option can be a helpful tool in the right circumstances.

Per-mile or percentage? The better choice isn’t always cut and dried.

Evaluating a carrier’s compensation package was once fairly simple if the carrier paid by the mile. Ask owner-operators already leased there about expected miles and multiply them by the mileage pay rate. Add or subtract accessorial and chargeback items and there’s your bottom line. In today’s pay landscape, however, even a mileage pay system can be complicated by rates that vary by length of haul.

But what about percentage pay? Many years ago, percentage programs for owner-operators prevailed. When deregulation came along in the 1980s, “everybody was on percentage when the rates dropped,” says Mike Bethea, Schneider National director of independent contractor operations. To help leased owner-operators stay in business and to help carriers get freight moved, many carriers shifted to straight mileage programs, says C.B. Mahaffey, J.B. Hunt vice president of operations for independent contractors.

An owner-operator running on percentage shares the brunt of market conditions with the carrier, earning less money in bad times. In today’s environment, however, with rates rising slowly but steadily, that can mean a built-in pay raise without running more miles.

If you’re accustomed to mileage pay, evaluating your earning potential under a percentage plan can be tricky. Hunt and Schneider are among carriers making the transition easier by offering parallel mileage and percentage programs. Having those options can provide a mileage safety net in bad times, enhance freedom of choice, and in some cases result in greater income on fewer miles.

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