The government will pay you an incentive based on what it would have cost them to move your shipment. This is known as the Government Constructed Cost (GCC). The GCC is calculated based on the
actual weight from your certified weight tickets and the distance of your move. You will be paid 100% of this estimated GCC.
Let's use a simple, hypothetical example:
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Imagine your authorized weight allowance is 10,000 lbs, but you only end up moving 8,000 lbs of your belongings, as proven by your weight tickets.
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The government calculates that it would have cost them $8,000 to hire a moving company to move that 8,000 lbs for you.
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In this case, your total PPM payment from the government will be $8,000. You do not get paid for the 2,000 lbs you were authorized for but did not move.
From that $8,000 payment, you will then subtract all of your actual moving costs, like your truck rental and packing supplies. If your total costs were $5,000, you would have a taxable profit of $3,000. If your costs were more than the GCC, you would have a loss.
Authorized operating expenses
You can deduct your actual costs from your PPM payment to determine your final profit. Keep receipts for all authorized expenses, which include:
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Rental trucks or trailers.
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Packing materials (boxes, tape, pads).
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Moving equipment rentals (dollies, ramps).
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Hiring professional movers or packers.
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Fuel and oil for a rental truck.
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Highway tolls, weight tickets, and other required fees.
Important note on taxes
Any profit you make from a PPM (the amount left over after you deduct your actual expenses from the government's payment) is considered taxable income. You will receive a W-2 for this income. It is highly recommended that you keep detailed records of all your expenses.
Advances and final payments
If you need money upfront to help pay for rental trucks or other moving expenses, you can request an advance payment from your transportation office. You may be authorized an advance of up to 60% of your estimated Government Constructed Cost (GCC). This amount will be deducted from your final payment after you submit your claim.
After you submit your completed claim with all required documents, you should expect to receive your final payment within 45 days. If there are any issues with your paperwork, the payment may be delayed.