How Much Money Do Owner Operators Make?
Being an owner-operator can be a rewarding but inconsistent and risky career path in the trucking industry. Many owner-operators work as independent contractors, operating under their authority and running their trucking businesses.
While the average owner-operator salary can seem higher than that of a company driver, it is important to consider the numerous expenses that come with being an owner-operator. These can significantly cut into your take-home pay. In addition, owner-operators may face inconsistent loads and the difficulties of running their own business.
After expenses, the average salary ranges from $40,000 to $60,000 per year, but this can vary based on the number of loads secured and the pay per load. For an experienced and successful company driver, this would be a decrease in take-home pay.
What’s Included In Owner Operator Pay?
As an owner-operator, your pay may be different than that of a company driver. While you may have the opportunity to earn a higher gross income, there are several expenses that you must consider when determining your total compensation.
These expenses can include fuel costs, insurance, truck maintenance, and other business expenses. These costs can significantly lower your average pay, making it important to carefully consider the financial realities of being an owner-operator. Additionally, the amount you can earn can be impacted by a variety of factors, such as the availability of consistent loads and the demand for the transport of goods in your region.
Below we will detail what is included in owner-operator pay. It is important to be aware that percentage and milage pay is how an owner-operator is paid when they have contracted with another trucking company. If they are running their operation completely, they will keep all the money from the load.
Percentage of Load Pay
The percentage of load pay is a common method used to determine the pay for owner-operators. In this arrangement, the owner-operator truck driver takes a certain percentage of the load pay for themselves, while the remainder goes to the carrier or trucking company. The percentage of load pay an owner-operator receives can vary depending on the company and the specific business arrangement.
The amount of pay that an owner-operator receives for a load can vary widely, with some jobs paying significantly more than others. This means that a high-paying load can mean a lot of money for an owner-operator, while a low-paying load may not even cover all of their expenses, potentially resulting in a loss for their operation.
While it may seem like it would be best to only take high-paying loads as an owner-operator, this is not always an option. Factors such as the availability of jobs, your experience level in the industry, and the demand for the transport of goods in your region can all impact the loads that are available to you. Additionally, fuel costs and other expenses must also be taken into consideration when determining whether a load will be profitable for your operation.
Mileage Pay
Mileage pay is another method used to determine the pay for owner-operators. Under this arrangement, the owner-operator is paid a certain amount of money per mile, regardless of the value of the load they are transporting. This type of pay is often used by carriers or trucking companies to compensate their drivers for the services they provide.
While mileage pay can be more consistent than the percentage of load pay, as it is not dependent on the value of the load, it may not always result in as much money for the owner-operator. This is because the amount of mileage pay that an owner-operator receives is often based on industry standards and may not fully take into account the specific characteristics of the load or the location in which it is being transported.
What Isn’t Included in Owner-Operator Pay
As an owner-operator, you don’t get the same benefits as company drivers. This is because you are responsible for paying yourself and taking care of your own needs rather than being an employee of a trucking company. As a result, many things are not included in an owner-operator’s pay that may be included in the pay of a company driver.
One of the first steps to becoming an owner-operator is leasing a truck, which can be a significant expense. In addition to the cost of the truck, owner-operators are also responsible for paying for their insurance, truck maintenance, and other business expenses. These costs can significantly impact the profitability of their operation and may lower the average owner-operator salary compared to that of a company driver like ShipEX drivers.
There are also many perks that company drivers receive that are not typically included in the pay of an owner-operator. These can include bonuses, home time, benefits, and stop pay, which can all contribute to a much lower average pay for an owner-operator. While some owner-operators may be able to negotiate these perks with their carrier or trucking company, they are not always available and may not be included in the pay of many owner-operators.
To determine the profitability of their operation and the potential pay that they can expect as an owner-operator, it is important for aspiring owner-operators to carefully estimate their expenses and consider the realities of running their own business.
Bonuses
These are extra payments that may be given to company drivers for meeting certain performance goals or for completing a certain number of miles. At ShipEX, our drivers have the opportunity to earn compliance and performance bonuses every month. They are not typically included in the pay of owner-operators.
Home Time
Company drivers may receive paid time off or additional pay for being away from home for extended periods. This is not typically included in the pay of owner-operators, who are responsible for managing their schedule and time off. Most owner-operator drivers cannot afford to have home time as they are paid by the mile.
Benefits
Company drivers may receive a range of benefits, such as health insurance, retirement plans, and paid vacation time. Without a company to back the expenses of a trucking business, the owner-operator salary does not usually include these benefits. These must be paid out of pocket, causing a lower average salary for owner-operators.
Stop Pay
Some company drivers may receive additional pay for making multiple stops or deliveries during a single trip. This helps the drivers earn the money they would have had from running miles during that time. For owner-operators, they have to eat that cost as they are paying themselves.
Base Pay
While company drivers may receive a base pay in addition to their other pay and benefits, this is not typically included in the pay of owner-operators, who are typically paid based on the loads they transport or the miles they drive.
Owner Operator Expenses
While the average base salary for an owner-operator may appear higher than that of a company driver, numerous expenses must be taken into account when determining an owner-operator’s profit. These expenses can significantly cut into an owner-operator’s take-home pay and may impact their ability to make a living in the trucking industry.
Below we will detail some of the expenses that you should be aware of if you are considering a career as an owner-operator truck driver.
Truck Payments
If you are leasing or financing your truck, you will need to make regular payments on it. These can be very expensive, depending on the truck you are driving. It is essential to include this in your plan.
Truck Maintenance
You are responsible for maintaining your truck and keeping it in good working order. This can include regular servicing, repairs, and other maintenance costs. These costs can be devastating to salaries as you won’t have a company to cover the cost, and you will not be earning money while undergoing maintenance.
Fuel and Tolls
You will need to pay for the fuel and tolls needed to transport goods and complete your deliveries. Depending on the location you are driving, these can be on the lower end, or they can be very expensive. You need to be aware of this cost and decide if the freight is worth hauling after expenses.
Licensing, Permits, and Applications
You will need to pay for any necessary licenses, permits, and applications required to operate your trucking business. Depending on your tax bracket, this can be over 30% of your net income.
Insurance*
You will need to pay for insurance to protect your truck and your business. This can include liability insurance, cargo insurance, and other types of coverage. On top of this, any insurance for yourself will come from your salary as you will not have a company paying that for you.
There may be other expenses that owner-operators face as well, depending on their specific circumstances and the type of goods they transport. To determine the profitability of their operation and whether they are being paid fairly, it is important for owner-operators to carefully consider all of these expenses and consult with their carrier or trucking company to determine the best course of action.
Conclusion
Many different factors influence how much an owner-operator truck driver can earn, and these are influenced even more by the types of jobs they take. Understanding what type of trucking job is best for you is essential. Our resources on local trucking jobs, long haul trucking jobs, and owner-operator trucking jobs can help you make the best choice for you.
