Lumper fees on pay stub, help it make sense.

There's nothing wrong with that procedure. It's not an expense on the company and no reputable one would claim it as such. It's also not income for the driver. The whole thing is documented on a rate con, lumper receipt and driver paystub so if the IRS audited that can all be proven easily.

 

If it's not "income for the driver", then why add it to his payroll in the first place. We're assuming that the driver's payroll is showing the lumper line itemized as a "reimbursement" and not part of his taxable income, but he hasn't made that clear yet.

Also, we're assuming that the lumper fee is mentioned on the rate con as reimbursable by the broker/shipper to the carrier and thus an itemized expense for the carrier. However, if the carrier is adding it to the taxable income of the driver and also claiming the line item expense, then something's off.

I'm just trying to figure out why pay for the lumper up front at the point of service, then add the fee to the payroll of the driver, only to reimburse it?

Smells like the carrier is double-dipping on his expenses for tax purposes. I don't know why or how it would benefit to do it this way, but that's what crooked CPA's are for...

 

We're not assuming anything. The IRS and anyone familiar with trucking taxes knows lumper fees are not a carrier/driver expense (nor driver income) and are always reimbursed because that's what the law says will happen. Google Title 49 of the United States Code, § 14103

 

Me thinks there is a miscommunication happening somewhere...

I'm not disputing what SHOULD be done with lumper fees. I'm questioning what is happening in this particular case. Without further details directly from the OP, I'm afraid we may never know.

Just to be clear- it is not standard practice for:

1) a carrier to pay the lumper fee by Comcheck when the driver is at the facility that generates the fee AND
2) that same week subtract the lumper fee from the payroll of the driver AND
3) reimburse the driver for the same lumper fee.

Rather, what should happen is:

1) the carrier pays the lumper fee by Comcheck when the driver is at the facility that generates the fee, then
2) the driver has nothing to do with that fee afterwards.

I've regularly had to pay lumper fees by calling dispatch and asking them to arrange a Comcheck payment; or even the broker at times. On the rare occasion, in the middle of the night, when unable to reach either the broker or dispatch, I've had to come out of pocket for a lumper.

Only when I've paid out of pocket for a lumper, did the reimbursement show up on my payroll for the week- and it was non-taxable.

Unless I missed it, no where in this thread has the OP mentioned whether the lumper fee subtracted from his payroll and added again was in the non-taxed part of his check. And I can't, for the life of me, understand why the driver's payroll was involved at all in the lumper fee when the company paid it at the time of the service.

That is what we're discussing. It seems redundant for the carrier to pay the fee at the time the fee is charged, then subtract the fee from the driver's payroll, then add a reimbursement for the same fee.

Now, if you could add any clarification to why a company would do that to a driver- I'm all ears.

 

As a reefer driver I think I had to deal with lumpers roughly 1/3 of the time.

I just didn't understand why the unloading cost wasn't baked into the overall rate like it was at most receivers...often the places with lumpers were bigger outfits too and not a mom and pop organization.

It just seems like it would save a lot of hassle for everybody involved and we wouldn't even be having this conversation.

 

It's completely normal for the lumper to be on your pay stub. It's on you check stub in the form of a cash advance/lumper. Then it is reimbursed to you once you turn in the receipt. Otherwise, it's going to be withheld out of your pay. It's purely documentation and record keeping reasons. It ain't nothing to be worried about. It's on my stubs all the time.

 

Although it seems like it would make sense.....
What actually happens is the Shipper is billed by carrier or broker for these fees....Most shippers Want it this way....Because they use this as part of the way they Charge individual customers for products at the wholesale level....
So every time Receiver XYZ raises/changes their unloading fees...Shipper ABC raised the cost x amount per pound/case etc to that customer,...,
Which of course in the end....WE ALL pay for this foolishness at the retail level

 

I hate doing this, but here goes...

So you're saying that every time your company pays a lumper through Comcheck or whatever, for a load you've transported, they deduct the lumper fee from your pay?

And then, after you turn in the receipt, they reimburse you for it?

Just trying to make sure I understand how your company does it...

 

Yes.....basically like an advance. Its how every company operates. Even if you get an advance for other expenses, if you don't turn in the receipt the company just assumes you BSed them for money lol, and deducts it out of your pay. I'll upload one of my stubs for reference.

 

I see what they did. Though I must question why the deduction of the lumper fee is an "after-tax deduction".

From the payroll website "ADP":

Source: What are Payroll Deductions? | Pre-Tax & Post-Tax Deductions | ADP

Clearly your payroll stub shows the addition of the lumper fee as an "after-tax deduction" which is the equivalent of a "post-tax deduction".

Your employer chose to categorize the item on your payroll as a "post-tax" instead of a "pre-tax" deduction, thereby potentially increasing your "gross pay" and increasing your "overall tax burden".

How does ADP recommend dealing with job-related expenses?

If I had these "after-tax deductions" on my payroll stub, I would definitely do the math and make sure that my W2 at the end of the year is lower than my end-of-year pay stub by the amount of all the "reimbursements".

I would also question why lumper fees are being added as "after-tax" instead of "pre-tax" deductions. Obviously, lowering the taxable pay by making the deduction before tax are taken out will lower the amount of taxes owed.

Again, it's impossible to know if the W2 and "end of year gross pay" amounts differ as they are supposed to in either the OP's or your own situation.

It's also unclear why the reimbursements are being done after a "post-tax" instead of "pre-tax" deduction.

I'm not a CPA, I just play one on TV, so sprinkle some salt on the above...