How Much Do Owner Operators Get Paid Per Mile

How much does an owner-operator make?

This is one of the nigh common questions for considering a change from the company driver to an owner-operator business. The boilerplate owner-operator base income is nearly $144,000 according to Indeed.com. But this varies widely depending on experience, the type of loads a driver will specialize in and carry, and how much time they spend on the road.

While that may sound like a lot of money, a word of caution: While that'south the average base salary for an owner-operator, they often accept home much less than that when you cistron in expenses. You lot have to dig much deeper to figure out an accurate owner-operator average salary — what y'all'd net each week and annually after paying those expenses.

Many owner-operators will only accept dwelling $45,000 to $80,000 a year, with a much lower average for the outset year. We'll explain why, but the most of import matter to call back is that you need to maximize income (AKA revenue) and minimize expenses to increase your net accept-habitation pay.

As well important: owner-operators don't have health insurance benefits through their employer, and then they rely on insurance through a spouse or partner or purchase their own insurance. So why would you desire to be an owner-operator? Let'due south pause down the numbers.

Owner-operator vs. company driver salary

In that location are 2 ways to look at salary: gross and net. The gross average owner-operator salary is 3 times what a company driver makes. But that'southward before expenses and taxes — net is what's left afterwards those.

Expenses are fixed and covered for nigh company drivers. Taxes are based on the tax subclass they're in. The more specialized and experienced a driver is, the more they volition make every bit a company driver. The biggest advantage of beingness a company driver is that employers handle everything for you lot. In that location's no overhead, so you lot don't have to worry about owning a truck or paying employees, and taxes automatically come out of your bank check. Y'all likewise don't have the startup costs of being a business possessor.

Possessor-operators take to buy or lease and maintain their trucks, manage their own schedules, and go along track of their own taxes and business expenses. You control your schedule, time at dwelling, the routes you accept, and the type of truck y'all drive. After initial startup costs, though, owner-operators have much college earning potential.

The issue: The more than responsibleness you take on, the higher your earning potential. The more than y'all let a visitor handle by working for them, the less control y'all take.

How do owner-operators get paid?

There are two chief ways: a per centum of the load or mileage. Earning consistency is the biggest difference between the 2.

Percent of load. Drivers have between 25-85% of the load revenue. And so if you go a loftier-paying or valuable load, your pay tin can be excellent. Simply a depression-value load can hitting you difficult — sometimes, y'all don't break even on those.
Mileage. Y'all become paid a set amount for the miles y'all drive, regardless of the load'south value. Information technology'southward more consequent than the percent-of-load-pay method, simply y'all may miss out on some potentially big paydays.

Which method should you lot choose? It depends on your situation. The load percentage could work for you if you save your money well, manage cash flow efficiently, and budget conservatively (based on average vs. best-case scenarios). You can bank a percentage of that coin for leaner load times when y'all have valuable loads.

If you lot demand a more consistent pay schedule, peculiarly if y'all have a family at domicile, yous may want to opt for the mileage route. Your salary will exist more consistent and predictable over time.

Because many owner-operators sign on with a carrier to go consistent loads, they may accept to choose one payment method. You tin combine the two if you piece of work with more than than one carrier; it makes bookkeeping and figuring profit and loss more complicated.

To decide what will work best, yous need to understand expenses and what they hateful to your bottom line.

What kind of expenses do owner-operators have?

Several expenses go with a trucking concern. Some are obvious, while others are more challenging to figure out.

Buying a truck

Get-go, you'll need to purchase or lease a truck. Decide these before yous purchase a truck:

The type of loads you want to haul
The lanes yous will operate in (which may impact emissions testing)
Your budget and the best truck you tin can afford
Whether y'all volition charter to a carrier, fill your own loads, or a combination

In figuring out what you tin afford, remember that an older truck will need more maintenance and repairs, and a newer one will price yous more upfront. Consider all those things when choosing which truck to buy and how to pay for information technology.

Maintenance

Even a brand new truck volition need things like oil and fluid changes, tires and wheels, regular grease jobs, compressor maintenance and repair, brake checks and replacements, and regular fuel filter replacements. Regular maintenance can prevent larger problems, just don't forget to include these expenses in your budget.

Fuel costs

Over time, you'll acquire the boilerplate fuel cost for your lanes, but information technology will vary as fuel prices rise and fall. This expense never goes away.

While there are reward programs and other ways to save coin, they have their limits. Upkeep for fuel based on the mileage you volition travel, and budget for the worst-case and highest-price scenario rather than the ideal one.

Insurance

Yous'll need the right insurance for your truck, but you'll likewise need insurance to embrace cargo loads if in that location'southward a loss, theft, blow, or other damage to your load. These claims are part of the business, no matter how smoothen your operation is.

The Truckstop.com cargo insurance program offers depression per-load insurance. Policies are "All Gamble" cargo insurance that covers any physical loss or harm from external causes discipline to the terms and weather of your policy). It serves as primary coverage and insures you from when y'all selection up your freight until it is delivered and signed for. This tin can assist with the cost and uncertainty of what load insurance will embrace in the upshot of a merits.

Earlier buying truck insurance, consider talking to an amanuensis who understands OTR work and your state's specific legal requirements and states in your lane. Brand sure yous're not paying for coverage you lot don't need but have enough to meet legal requirements and cover your ain needs.

Taxes and paperwork

Anybody's favorite! If you were a company driver earlier, you probably had taxes taken out of your check automatically. Now, you lot will have to runway and pay them yourself, including self-employment taxes and Federal and state income taxes.

A few elementary rules volition go on you lot out of trouble with the IRS and your state tax authority.

Save to pay taxes. Put abroad twenty-thirty% of everything you earn in a taxation savings account (TSA). This guarantees you lot have the funds to pay your taxes when due.
Pay quarterly taxes. This keeps you legal with the IRS and prevents a surprise tax pecker on Apr fifteen.
Hire an accountant.Unless you are expert with numbers and the taxation code, rent someone to help with your taxes. They'll know about specific deductions and how to minimize your taxation liability.
Track everything. This includes mileage and all expenses. You lot may want to use accounting software then that y'all tin give your accountant access at the terminate of the year, and your taxation prep will be faster and cheaper.

Also, recall: in well-nigh states, you lot have to file an almanac company report (ordinarily online) and might have to renew your LLC or other corporate licensing. Y'all could also be subject to other local business organisation taxes.

Keep these expenses meridian of heed as you create a budget and decide your salary.

Pro tip: Once you're making plenty money, your auditor tin recommend means to set yourself up as an employee of your own company. You tin can deduct taxes and issue yourself a paycheck and bonuses, depict benefits yous tin can deduct from your taxes, and increase your contributions to a 401K to programme for retirement. These are simply a few extra perks of being a small business concern owner.

How can owner-operators brand the virtually coin?

Considering all these things, how much does an owner-operator truck driver brand at the end of the day? Once more, to make the nearly money, increase your income, and reduce expenses. The first step is to maximize your coin, which you should outline in your trucking business organization plan. Here are some money-maximizing ideas:

Go along your truck moving loads. Use load boards to find quality brokers and loads. Your vehicle will ever be working to make money for you. See how load boards work hither.
Get your ain authorization. It volition take a couple of months, so programme accordingly. Your say-so is your motor carrier number, which lets you haul freight with your ain trucking company. It's the showtime pace to condign your ain dominate.
Use factoring to maximize cash mensesby getting payments quickly.Truckstop pays you now; the broker pays usa later, giving you lot operating greenbacks correct away.
Sign up for ITS Dispatch to keep moving loads rather than looking for them and doing manual paperwork. Nosotros accept affordable dispatch solutions, no thing what size trucking functioning y'all accept. The less back-function paperwork yous take to do, the more time you can save, and the more money you make.
Protect your business with cargo insurance.When something gets in the fashion of delivery or cargo is stolen or damaged, you lot are protected, and y'all don't have to pay out settlements on your ain.
Book jobs in the highest paying cities. Some lanes and cities pay college rates for moving loads.

The more than coin you make, the greater your profit margin should be. Reduce expenses to maximize profit.

Other Possessor-Operator FAQs

Here are some of the almost common questions nigh becoming an owner-operator.

How exercise I become an owner-operator?

To become an owner-operator, you lot'll need to buy or lease a truck, become your commercial driver's license, and pass a physical test. You will as well need to:

Form a business organisation by registering with your state.
Apply for a USDOT Number.
Become your trucking authorisation.
Purchase truck insurance that meets FMSCA requirements.
Install FMCSA-compliant electronic logging devices (ELD).

If you lot programme on getting a loan or financing, you volition also need to develop a business plan for how yous will manage your business and exist prepared to show it along with tax returns or other applicable finance information.

Once everything is in place, then you need to find loads. The Truckstop.com Load Lath for Carriers makes it piece of cake to find loads, negotiate rates, and keep your business running smoothly.

What tax deductions can owner-operators merits?

Every bit an owner-operator, you can deduct much of the cost of operating your business. While you want to consult with a tax advisor, some of the more than mutual tax deductions for owner-operators may include:

Interest paid on any business loans
Depreciation of equipment or belongings
Home function
Insurance premiums
Retirement plans
Startup costs
Supplies
Permits and license fees
Travel
Truck charter
Bookkeeping services
Communication equipment
Truck repairs and accessories

The IRS requires you lot to document your expense and demonstrate that it is an ordinary and necessary cost to run your business.

What expenses do owner-operators take?

When you drive for a company, they volition take care of equipment, and everything else needed to run the business. As an possessor-operator, that's upwardly to yous. Yous will demand to invest in trucks and equipment. Other typical expenses include:

Equipment maintenance and/or repairs
Fuel expenses and tolls
Business organisation licenses, transport permits, registration fees, and vehicle inspections
Commercial truck insurance and wellness insurance
Taxes
Meals and lodging during travel
Professional services
Broker fees
Load board subscriptions
Factoring expenses (if applicable)

What types of lease agreements are available for owner-operators?

When starting a trucking business concern, drivers may opt to purchase their equipment outright, get a small business loan, or enter into a leasing agreement. Options include a charter, a lease-purchase, and a lease-on understanding.

Lease agreement

Owner-operators pay a monthly fee to lease the vehicle. Depending on the terms, drivers are responsible for maintenance and upkeep and may be required to put a downwardly payment at the kickoff of the lease.

Lease-purchase agreement

Also known as charter-to-ain, this allows an owner-operator to pay a monthly fee to a carrier or fleet provider for use. At the end of the agreement, the driver can buy the truck, with a portion of the payments going towards the purchase price.

Charter-on agreement

The owner-operator already owns the truck and leases the rig to a trucking company with a lease-on agreement.

Keep more of the money you earn by reducing expenses.

There are countless ways to save money. Regular maintenance, fuel advantage programs, shopping around for the about affordable insurance, and protecting your assets are just a few.

You can make a lot of money as an owner-operator, and being your own dominate brings a lot of freedom. But you likewise have to manage yourself to make sure y'all maximize your time, make the most coin possible, and reduce your expenses to increment your salary. Be sure you are running on time, that you and your truck are reliable, and that your equipment tin can get cargo safely to its destination. In the end, information technology's your task to pay your salary. Make sure you're getting the money yous deserve.

Founded in 1995, Truckstop.com built the internet's starting time digital load board to address the challenges carriers faced in finding loads. Today, Truckstop.com is one of the largest and nigh trusted brands in the freight transportation industry, connecting tens of thousands of carriers and brokers with applied science solutions to manage the entire freight lifecycle.

Truckstop.com solutions include freight matching, marketplace rates, partner screening, monitoring tools, transportation management systems (TMS), and integration with most major industry software partners' complete payment solutions.

Our product offering is continually expanding to include tools to improve and manage the freight moving lifecycle.

Set up to become an owner-operator?

At that place are ii types of professional truck drivers out on the road: company drivers and owner-operator truck drivers. If you're interested in getting started, Truckstop.com can assist y'all take the starting time steps in getting your trucking authority. Request a demo, and allow u.s. show you how.