Hitting the open road in a big rig, seeing the country and making truckloads of money. This is the dream for would be truck drivers. And the reality? How much do you truck drivers make?
There are heavy costs involved in owning a truck business. You’ll need to have the business savvy and keep careful track of your income and expenses to earn a good salary.
How do you become more profitable? Well, you’ll either need to drive more or decrease your costs as much as possible.
This article will make it easier for you. If the open road is calling you and you think you have what it takes read below. Make sure you know all the facts before buying that truck and living your dream.
How Much Does an Owner Operator Truck Driver Make?
The owner operator truck driver salary is around $50 000- $60 000 per year. This may seem like a lot but it’s important to consider all the costs involved.
The pay scale for operators varies depending on the truck license type. A local owner operator salary with a normal CDL license driving local routes is on average $66 000.
CDL OTR truckers (‘over the road’ drivers who transport freight over long distances) earn on average salary $82 000 per year. A team truck driver makes a yearly income of $71 000 per year.
The type and purpose of the truck being driven can also impact the self employed truck driver salary. For example, a dump truck driver earns around $72 500 per year. A log truck driver earns far less at around $37 980 per year.
Pay structures also impact owner operators’ salaries. Roughly 50% of independent truck drivers are paid on a ‘percentage of the load’ structure, which can be anywhere between 25-85% of the load revenue.
This type of payout structure can be unpredictable as there are high and low paying loads & often you can’t pick which ones to carry. This percentage of load payout is better suited to truckers who are disciplined and practice good financial management.
The remaining 50% of truck drivers are paid for the mileage they cover. This can be a better structure as the payout is the same regardless of the load value. The mileage payout is better suited to truck drivers with families who need more consistency in their earnings.
Average Owner Operator Salary per Mile
Owner operator truck drivers average 2500-3000 miles per week. The average mileage rate is $1.35-$1.65 per mile for a full or an empty load. The pay per mile salary is therefore between $13 500- $19 800. This is the rate before expenses which need to be carefully managed to ensure maximum profitability. It’s important to know what you’ll make a week to have enough cash flow to float your expenses.
Owner Operator Expenses
Buying a Truck
One of your biggest decisions when starting out is whether to buy or lease a truck. Your truck will be both your largest asset and your largest expense. It’s important to remember that you still need to build a relationship with the carrier; you won’t immediately reach your maximum earning potential.
A semi truck is an actual truck with the engine; the tractor trailer and 18 wheeler refer to the combination of semi-truck and semi- trailer. Together they are a tractor-trailer unit. The average cost of a second-hand tractor-trailer is around $37 500.
Buying your own truck is the best way to go if you can afford it as you’ll build equity with each payment you make. Once you own the truck you can continue driving it without monthly payments or use it to trade in for a new rig.
Buying a truck could mean lower insurance premiums and could have tax advantages. On the downside, you’ll need between a 10-25% deposit upfront.
Maintenance & Repairs
The average owner operator will spend around $14 000 per annum on maintenance and repairs. This can vary depending on the age of the truck, make & model and the quality of the repairs & maintenance.
One of the largest expenses in this category is the replacement of tires which can cost $250 per tire. Yearly tire costs are generally between $1000-$4000 depending on the mileage done, load weight and type of tires that you buy.
Fuel is the biggest cost of running your truck business. The average owner operator spends between $50 000- $70 000 on gas. It’s best to work out your truck’s average cost per mile and then multiply it by the number of miles you are projecting to run. You’re likely to drive an average of 110 000 miles per year.
As a small business owner, your taxes will be more complicated than what you’re used to. It’s best to get an experienced accountant to help you minimize your tax liabilities and write off expenses.
Several expenses including vehicle-related expenses (tolls, parking, maintenance, fuel registration, tires and insurance) can be deducted. You should keep good records and receipts as evidence of deductions.
Truck driving is a high-risk profession so having adequate medical insurance is very important. Truckers don’t get a pay package which includes a medical cover, therefore, they must take out their own insurance. The average medical insurance cost is around $3400 per annum.
Owner Operator Income after Expenses
Owner operator truck drivers earn an average income of $183 000 per year. Expenses are a whopping 70% of this income. So how much do owner operators make? The average self-employed owner operator net salary after expenses is around $50 000-$60 000 per annum.
Leased or Own-Authority Independents
Big rig drivers often sign up with carriers to ensure a consistent flow of work. Owner-operators can choose to lease their services to a courier company. This means that they still have their own truck, but they drive for one carrier only.
They can also operate as own-authority independents which means that they are responsible for finding their own loads and may drive for several carrier companies.
The advantage of being an own-authority independent contractor is that you can set your own rates on the open market and find your niche. The downside is that you must source your own work which can be difficult.
If you lease to a single carrier, they will dictate the rate you get paid, but you’re likely to always have work. If you’re leased, it’s even more critical to managing your expenses carefully because of your fixed rate.
Trucking is not a career for the faint-hearted. It requires you to be on the road and far from home for long periods of time. How much money you make is determined by how well you manage your business expenses.
Owner operated truck driver businesses are only profitable if owners are business minded and manage their finances well.
Despite all these challenges, the call of the open road can be overwhelming. If you’re free-spirited, entrepreneurially minded and ready to take on the adventure of a lifetime this is the perfect job for you.
Also Read: Top 10 Trucking Companies