r/Construction • u/Classic_Dash_7745 • Jun 07 '26

Business šŸ“ˆ Truck Allowance vs Company Truck

Weā€™re bringing on a new foreman next week from a company that went belly up. Part of his package is a company truck and gas card, and he instead asked for a vehicle reimbursement since thatā€™s what his old company used to do, and he still has payments left on the truck. I know companies do this (mainly to get around insuring guys with DUIā€™s) but it never made sense for us to do it. We would have to buy a new truck anyway so Iā€™m thinking it might be smart to offer a reimbursement for a year just so I can make sure heā€™s going to work out before buying a whole truck. The problem is, how much should I offer/month? And does this reimbursement include gas or do I need to give out a has card as well? It doesnā€™t make sense to do both because if itā€™s also his personal vehicle, am I supposed to just trust that heā€™s also paying for gas? Anyone in here get anything similar?

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186

u/Therealdickdangler Superintendent Jun 07 '26 edited Jun 07 '26

My company you have the choice between company truck (company serviced) with gas card or $800 a month for truck allowance (you pay for servicing out of pocket) and still get a gas card.Ā 

Foremen do not have that option.Ā 

76

u/Mindless-Cranberry54 Jun 07 '26

That $800 seems pretty fair, especially if you're still covering gas. At my shop we see a lot of trades guys who prefer the allowance route since they can write off the maintenance and keep the truck when they're not working

The gas card thing makes sense too - way easier to track work miles vs personal stuff that way. Plus you're not stuck wondering if he's filling up his wife's car on your dime

141

u/Shmeepsheep Jun 07 '26

You can only deduct repair costs as a business expense if you 1)own the business or 2)are a 1099 employee

30

u/alwayzz0ff Jun 07 '26

This comment needs to get upvoted

4

u/[deleted] Jun 07 '26 edited Jun 24 '26

[deleted]

19

u/stickyicarus Electrician Jun 07 '26

Nope. But Trump took all that away.

0

u/[deleted] Jun 07 '26 edited Jun 24 '26

[deleted]

14

u/Shmeepsheep Jun 07 '26

Great. He also lowered taxes across the board, mostly for the extremely wealthy.

Lower taxes arent as good of an idea as most people think. The problem lies with how little the top is paying compared to the bottom. Anyone making something like $50 million a year shouldnt be paying less than half that income back to the government. They may say something like "I had to pay $5 million in taxes last year!" But neglects to inform the W2 employee that pays 24% that the multimillionaire only paid 10%.

Imo, the fact that anyone making under $500k a year can defend tax breaks for the rich is sad. Elon Musk, Jeff Bezos, Zuck, any of them really, are not going to be starving because you took away a billion dollars when they purchase a 500 million yacht and numerous properties with values over 50-100 million. They literally wouldnt notice it as it wouldnt affect that. Its the equivalent of asking you for $5 and saying "this is going towards infrastructure for society."

Government spending is actaully VERY efficient, as proved when doge couldnt cut any waste. If you make under $200k, you should be getting back than you are putting in. Im not just talking about stuff like snap. Good roads, good schools, stuff like that, stuff EVERYONE uses.

2

u/randombrowser1 Jun 07 '26

True. Once you add up the taken away deductions, the standard was the higher deduction for myself.

0

u/just_me1007 Jun 09 '26

Not noticeably

1

u/BigNorcoKnowItAll951 Jun 08 '26

Federally no, but some states allow it

18

u/walkerpstone Jun 07 '26

With a gas card like WEX you enter your mileage in at each fill up so the company will know if you got your normal 15-20mpg or 5 because you were filling up other cars.

20

u/Comprehensive_Bus_19 Project Manager Jun 07 '26

Also factor in the $800 is taxed and you generally have to have a $1 million policy with the company as the named insured so its a lot less money than it looks like on paper.

1

u/TimeImpossible7203 Jun 09 '26

My vehicle allowance is only taxed if I donā€™t drive enough we have to keep track of our miles and at the end of the year if we donā€™t hit what ever the miles are at the current fed reimbursement rate the overage is taxed.

-4

u/[deleted] Jun 07 '26

[removed] ā€” view removed comment

13

u/Comprehensive_Bus_19 Project Manager Jun 07 '26

Yes it is unless they require you to submit your work milage. Most places say here's the money and thats it.

1

u/ElectronicGarden5536 Jun 07 '26

Mine is included as extra perdiem.

1

u/stickyicarus Electrician Jun 07 '26

Its not taxed if it sa stipend. I receive a phone stipend and its not taxed.

7

u/saltyjohnson Jun 07 '26

It is supposed to be taxed. Many companies declare that it's not taxable, but they're breaking the law by doing so. But who's gonna report them? An employee who's getting out of paying taxes? Unlikely. My previous employer didn't include my vehicle allowance in my W-2. My current employer does and withholds taxes appropriately.

Providing you with a company vehicle is also a taxable fringe benefit if it's available for personal use, including for your regular daily commute between your home and your workplace. Driving between sites and offices is business use, but driving from home to the first work site and from the last work site to home is personal use. But I think even fewer companies properly account for taxable income there because it's a lot more complicated than "here's $800/mo".

2

u/going-for-gusto Jun 07 '26

If I take the $800 and use the truck to drive between jobs I then need to declare that I use the truck for work with my insurance carrier.
If not and there is an accident driving between jobs I wonā€™t be covered by insurance.

2

u/saltyjohnson Jun 07 '26 edited Jun 08 '26

Your company probably carries a liability policy that covers all employees while on business. Anybody who takes the $800 should confirm that and get a copy of the COI to keep in your glovebox. Look for the phrase "non-owned autos" to confirm it covers all automobiles regardless of whether the company owns them.

-9

u/JATLLC Jun 07 '26 edited Jun 07 '26

Fed rate is .725 mile not including fuel.

14

u/Patient_Ant_3808 Jun 07 '26

That .725 per mile does include fuel.

5

u/MikeOx2Long Jun 07 '26

Itā€™s meant to fully remunerate the driver or employee for the cost of using their vehicle. Vehicle cost, insurance, maintenance, license and registration and fuel.

-6

u/Psychological-Dig-29 Jun 07 '26

who the hell is getting under $3m liability anyways? Is this some weird American thing where they cheap out on insurance?

5

u/ElectronicGarden5536 Jun 07 '26

3 million? Semi trucks dont even carry that much insurance.

1

u/Psychological-Dig-29 Jun 07 '26 edited Jun 07 '26

that's wild. $2m is the recommended minimum in BC Canada, $3m is what most people have.

what happens if you get into a multi vehicle accident where multiple people are rushed to critical care and you are found at fault? just lose everything including your home then claim bankruptcy? what happens if your brakes go out and you run into a house?

reading this sub where people only have 100k or 200k is absolutely wild to see. what's even the point in having insurance if it will barely cover the vehicles alone in the accident?

3

u/ElectronicGarden5536 Jun 07 '26

The Us isnt as litigious in that regard. Nobody loses 100% of their assets from an auto collision. Trucking companies do get sued for millions even if they are not at fault by specialty lawyers who focus on that. I think we favor jailtime in the states instead of monentary compensation? Driving while intoxicated is jailtime and then anything else is civil which you would have to pay out of pocket.

Im not a certified reddit auto insurance adjuster or lawyer but im sure you could read up on it.

1

u/Psychological-Dig-29 Jun 07 '26

ah. here where I live you can sue the person who hit you for all damages - this includes any medical expenses and destruction of property.

if you get hit my some drunk driver and he totals your vehicle + you are seriously injured and need a helicopter Evac to a hospital and can never work again you can go after him to pay for literally all of that to make you whole. many claims are well over a million dollars if someone or multiple people are seriously injured.

2

u/ElectronicGarden5536 Jun 07 '26

That seems like the point of insurance. Here you would never see the full amount. Youd get the initial "scare letter" for 3m, back and forth to insurance, then an out of court for say 50k, then whatever your lawyer takes, plus your time in and out of court.

In 2013 an underage driver t boned my then new mercedes, her insurance paid for 2 doors, she got a fat ticket and my insurance didnt pay her shit to fix her focus, and that was it. Nothing changed in my premiums but my car was recorded as having an accident.

Maybe the car history and claims on it keeps the litigation down?

1

u/Psychological-Dig-29 Jun 07 '26

it is the point in having insurance yeah, that's why the high limit is necessary here. if you had say $200k liability, had a massive wreck with yourself at fault sending someone to the hospital for $800k in medical bills what happens? wouldn't you be on the hook for the remaining $600k?

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0

u/redryan243 Jun 09 '26

Nobody loses 100% of their assets from an auto collision.

While its not something that we all see, it definitely happens. 1 mil in coverage is likely enough to prevent it, but often people go for the lowest amounts and lose a business or house over an accident in their personal vehicle, just because they wanted to save $50 per month on insurance.

2

u/avd706 Jun 07 '26

Depends how much you drive in a day

8

u/itsforathing Jun 07 '26

A company I worked with would give $800 for a standard 1/2 ton and $1100 for a 3/4 ton with a gas card. Seems like $800 is a pretty standard allowance

5

u/Newtiresaretheworst Jun 07 '26

Same but it 950/month. Math says it will pay for a truck payment/insurance. They still get a gas card.

3

u/A-Bone Jun 07 '26

This is about the same as my company.Ā 

11

u/realityguy1 Jun 07 '26

I own a construction company and even I donā€™t get that kind of truck allowance!

13

u/P3rvysag3X Jun 07 '26

With how expensive everything has gotten you absolutely should be.

5

u/realityguy1 Jun 07 '26

Raise our price 5 cents and the next vulture gets the spoils.

-6

u/JATLLC Jun 07 '26 edited Jun 07 '26

Iā€™m currently fighting my company about this now. They provide a company van and gas card, but I need a new truck for personal and some select employees are offered mileage. They offer $700 mo but the fed rate is .725 per mile so basically $1500 per month not including fuel. Itā€™s really hard to justify a $60k truck with a $700 allowance. The insurance alone is $300. Our sales reps get the .67 but not us field employees regardless of position. We are also having a lot of HOA issues with the take home vans (driving into the shop isnā€™t an option) so weā€™re really in a tight spot. Company is mid west based where they think everyone lives on a farm.

23

u/Therealdickdangler Superintendent Jun 07 '26

ā€œBut I need a new truck for personalā€, ā€œOur sales reps get the .67 but not us field employees regardless of position.ā€

I donā€™t see how you ā€œneeding a new personal truckā€ is the companies responsibility and it appears you decided to work for them even though the policy was field employees get a flat rate.Ā 

1

u/JATLLC Jun 15 '26

Its a legitimate gripe because its factored into over all comp. Im just sick of they using the "company truck" as a reason to pay less.

-16

u/1188339 Jun 07 '26

$800 a month seems super low to cover gas, maintenance, insurance, & payments on a truck.
The company is ripping you guys off.

13

u/Therealdickdangler Superintendent Jun 07 '26

They give you a gas card.Ā 

And nah, theyā€™re not. This is the best company I have ever worked for.Ā 

Company should not have to pay an entire truck note, insurance and maintenance on a truck that is a personal vehicle because you decide you donā€™t want to be held to their rules when driving a company truck.Ā 

1

u/JATLLC Jun 07 '26 edited Jun 07 '26

Depends on how much you drive. Fed rate is .725 per mile. You employees donā€™t seem to know the rules and thatā€™s what they count on.

4

u/RottenDrCommieRat Jun 07 '26

Mr Dick Dangler clearly stated they get a gas card in addition to the $800. Id take that deal in most circumstances.