Thursday, March 19, 2009

Questions Answered: Pay on Reserve

Do you still get paid reasonably with per diem if you don’t fly all week? obviously not as much as flight time but curious to know if its still worth while pay.

This answer involves math. Math is not my "thing" so I will do my best. At my airline (and many regionals for that matter) I am paid for 75 hours of flight time each month while I am on reserve. As long as I am available for duty each day I am assigned reserve I get paid 75 hours at my current pay rate. The average month has me working 20 days.  Not too shabby.

This month I was assigned ready reserve (airport standby). Here is a little "gotcha" about pay at airlines.  I am on duty 8 hours during airport standby. For each hour I am on duty I get paid per diem. For this example assume my rate for per diem is $1.75/hr. So each day I sit airport standby I get paid at least $14 in per diem. All $14 is taxed if  I terminate by duty in base. Now during those 8 hours of ready reserve I only get paid my full hourly rate for 3 hours 45 minutes each day (75 hours a month /20 days of duty). Thus each day I am on ready reserve I earn roughly $140. Not too shabby for just sitting around an airport. Well if broken down into an hourly rate I earn about $17.60 an hour. Suddenly not so great.

The more senior pilots in my status who are on reserve have it much better. The top few pilots in my status on reserve get paid a minimum of 75 hours each month and may never set foot in an airplane much less an airport. As long as they are available each day for duty they get paid the same 3 hours and 45 minutes I do. They don't get the extra $14 I get I have that going for me!

Some senior pilots will purposely bid reserve and bet they will have time off to finish projects around the house, work a second job (must be a flexible job as there is always a chance they will be called out) or take care of the kids (again one must have a backup plan in case they are called out!).

I mentioned earlier that my per diem is taxed. I'm not an accountant, but they way it was explained to me (and thus the way I understand it) is if I terminate duty in base then for tax purposes it's though I never left. I could fly halfway across the country and back and still be taxed on per diem.

Most pilots are not taxed on per diem. If I were to leave on an overnight trip tonight then all per diem from the time I started duty until I finished tomorrow would be UN-taxed because I left base. Additionally if I were on a multi-day trip where I overnighted in a different city each night I would not be taxed. I could (and normally do) fly in and out of base all day and not be taxed.

Keeping track of pay can be very complicated. Many pilots use logbooks (different from flight time logbooks) to keep track of time. Most of these books are red...not sure why. Here is a one I used for about a week before I went electronic.

When I was holding a line I would get about 270 hours of per diem each month. Last year my total per diem pay was just over $4200.

Thanks for the question and keep them coming.

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