At least for the time being, I'm going to be working for an insurance inspection service. On the surface, it sounds like a dream job--you work from home, going out to take photos and draw diagrams of people's houses for their insurance carriers. Many times you don't even have to go into the homes, just view and measure from the outside. You make your own hours, but the inspections have to take place between 9am and 5pm (or earlier in the winter due to darkness.) You can do the paperwork at anytime. Full time is 35-40 hours with benefits; they're not fabulous, but better than nothing.
The problem? The pay: $10/hr. According to the field manager, you can make up to $20/hr depending on how many jobs you do in a day, but he could not give me specifics. In fact, he didn't know very much other than how the training progresses. It is paid training--40 hours that has to be done within 2 weeks; piece of cake (I think.)
So, I'm going with it, as it's the only thing that's come along (that's concrete; I have a few irons in the fire) and $10/hr is better than zero, which is what I have.
The mileage is another cluster--they allot $0.40 per mile, but you don't get paid on top of your hourly rate. The calculate your mileage, then deduct it from your pay, adding it back in as 'nontaxable' income. WTF??
I don't think this is a scam, but I don't have high hopes. Here's hoping I'm pleasantly surprised...
Laughter will cure life's ills. Have you had your laugh today?
And I sure hope it's legit.
Not sure if they can pay mileage as non-taxable income... and the federal rate for mileage right now is like 56 cents/mile. Not sure they can pay you less than that- but IF they can- you can probably deduct the difference between the reimbursed rate and the federal rate on your taxes.
Or do they mean they add your gas in, then take it out, then tax, then add gas back in?
Something doesn't sound right.
This is the math:
40 hrs @$10/hr=$400.
Drive 80 miles @$0.40/mile=$32
400-32=368; this amount gets taxed.
Say I net $302 (just grabbing any #); they add the $32 back on (with no taxes), so I net $334.00.
I don't think I've made this low pay since high school
Just make sure that YOU have some kind of references for THEM and their reputation with employees. Things aren't always as they seem these days.
Also... mileage reimbursement is exactly that- reimbursement for the cost of driving your own vehicle for company purposes (gas, wear and tear, repairs, etc). Basically they are making YOU pay for the cost of driving and calling it your income.
Something is not kosher here, call the DOL and ask about this.
I agree with contacting the DoL to see what they can legally do.
I haven't ever heard of the way they are deducting and adding it back in. That absolutely doesn't make sense. They should pay you your rate, take out deductions, and if they want to reimburse mileage on the same check, add it back in at that point. It sounds like they are deducting the mileage from your hourly wage, and they can't do that.
If you are like me, you want to know the info before fighting your battles. Don't fight the fight about how much they pay in mileage, that is within their right (whether I agree with it or not is another story). They way they deduct it and add it back in is incorrect.
[This message edited by confused girl at 10:06 PM, September 8th (Sunday)]
I keep coming back to this and just did a general calculation. If they pay you in this manner, they are totally screwing you over, not mentioning probably illegal.
Example A) Gross wages $400. Deduct 23% for taxes = net wages $308. Add back in the "not taxed mileage" for a total of $340. This is the correct way to do it.
Example B) Gross wages $400. Deduct mileage of $32 for a balance of $368. Taxes on this at 23% is $84.64 leaving with a net of $283.36. Add back in the mileage for a total of $315.36.
I try not to jump to the fact that they are intentionally doing something wrong. Is this a small company? Perhaps the payroll people were ignorant of the correct way to do it and thought this sounded correct. Regardless, the way they calculate it, it is wrong.
Second, as others have said, mileage reimbursement is just that, reimbursement for the gas, maintenance, and wear and tear on the vehicle. That reimbursement does not get taxed. If they reimburse less than the current IRS rate of $0.565 then you can deduct the difference from you taxes as an unreimbursed business expense.
What they are doing is manipulating the gross wages of their employees, which then reduces their employer tax liability. Yes, it lowers yours as well, but as demonstrated above you are receiving less net income as a result as well. They are playing a very risky and dangerous game, and if the IRS gets wind of it they may have some very big problems.
If you need this job as a means of income for right now until something else comes along, then do it, but go in with your eyes open. In the meantime, I would definitely be making a call to both the IRS and your state's DOL and blow the whistle on their practices because it is wrong, and possibly tax fraud.
This above all: to thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man ~ Shakespeare, Hamlet