Owner Operator

How Much Income Do Owner-Operators Need to Cover Expenses

Published on
March 22, 2022
min read

When you first started researching becoming an owner-operator, you likely had your eyes set on the high earning potential. Owner-operators can easily earn well into the six-figures each year, but the cost of running your own trucking business isn’t cheap.

Having your own rig requires you to be the sole proprietor of your business and vehicle. Your truck is your career, so factoring its ownership costs into your business ledger is crucial for accurate financial planning.

The reason it can be such a challenge to become a successful owner-operator (or fleet owner) is the low profit margin. This means the operating costs you face tend to run close to what you earn. In order to break even (surpass your expenses with earnings), you need to effectively manage your costs and choose your jobs wisely.

In this guide, we’ll offer an owner-operator pay breakdown to help you optimize your earning potential.

How Much Does It Cost to Be an Owner-Operator?

On average, an American owner-operator earns $100,000 to $150,000 per year. It’s easy to see this figure and think you’ll instantly become rich, but with so many costs, you may only take home half of that or less your first year.

Most owner-operators have a 5% profit margin. This means they take home 5% of whatever they earn for a given job. So, if you sign a contract with a client that will pay you $60,000 for the year, you’ll only take home 5% of that figure, which is $3,000.

Where does all the other money go? It’s a large combination of expenses ranging from business fees to food, housing, road accommodations, fuel, inspections and insurance. The costs can pile up quickly, especially if you haven’t thoroughly investigated what it really costs to get into owner-operator trucking.

Let’s take a closer look at some of the expenses you’ll have to account for.

1. Your Lease or Truck Payment

The greatest business expense all owner-operators face at the start of their career is their truck itself. If you’re planning on purchasing a truck, a used semi costs between $45,000 to around $100,000. New models range from $100,000 to over $150,000.

Leasing can be more affordable upfront, but you’ll still have to budget for at least $1,500 to $3,000 in monthly payments. The greatest benefit of leasing is that you do not need to put a large sum of money, if any, down to acquire your vehicle.

When buying, you’ll need to put down at least 20%.

2. Insurance

Owner-operators must file their insurance with the Federal Motor Carrier Safety Administration (FMCSA). Depending on the type of cargo you haul, minimum insurance requirements range from $750,000 to $5 million in coverage. You’ll also have to consider riders essential to your business, such as personal liability insurance, bodily injury protection, collision coverage, bobtail insurance and so on.

The average owner-operator’s insurance costs $8,000 to $15,000 per truck annually.

3. Fuel

Owner-operators have to pay for their own fuel, which is probably the most expensive difference between running your own business and driving for someone else. Fuel costs typically run up to $70,000 a year, which can be even more for long-haulers. Inflation rates are also affecting fuel rates, so accounting for every mile is essential.

One way to lower your operating expenses is to calculate your mileage rate to be profitable. This allows you to optimize your routes for fuel efficiency, spend less, deliver more and, ultimately, take home a greater profit.

4. Documentation

There is an immense amount of paperwork to register as an owner-operator trucking business. For starters, you’ll need to register your company with your state. Filing as an LLC (limited liability corporation) typically runs between $50 to $300. While this may seem hefty, it’s essential to have a distinct business entity. This protects your personal assets from any liability, and it legitimizes your trucking business for tax documents and client relationships.

Additional documents that affect owner-operator costs are:

  • Business license renewal fees
  • Transportation permits
  • Vehicle inspections
  • Truck registration
  • Vehicle, business and personal health insurance

You will also have to pay for a number of permits to operate legally. These include:

  • International Fuel Tax Agreement (IFTA) license and decals
  • Vehicle tags
  • Heavy Vehicle Use Tax (HVUT) tax fee – $100, plus $22 per 1,000 pounds for vehicles over 55,000 lbs or $550 annually for vehicles 75,000 lbs and up
  • International Registration Plan (IRP) credentials
  • USDOT authority number – $300
  • ELD registration – $350 annually

5. Load Board Subscriptions or Broker Costs

In order to grow your business quickly, you’ll have to work through a broker or apply to a load board. These cost several hundred dollars to over $1,000 annually. You can pay for most load board memberships on a monthly basis. They tend to run between $35 to $50.

6. Taxes

There are two ways you can handle your taxes. you can file taxes as an independent contractor, which uses Form 1099. How much you owe will ultimately fall on your state, how much you earned and the deductions you qualify for. Paying quarterly taxes can help you manage your finances and save more throughout the year. Alternatively you could set up as an S-corporation or LLC and pay yourself as an employee from that entity. This actually has a lot of advantages (including withholding payroll taxes throughout the year), but it's more complex to set up and manage.

7. Truck Management Software

Fleet owners will rely on a truck management system for vehicle maintenance schedules, billing, driver records, dispatching and more. These systems make operating much easier and streamline processes that could easily get convoluted without the right software supporting them. Truckbase is a great low-cost software tool built specifically for owner operators and small feets. It’s generally easier to use than the software built for large fleets.

Regardless of what software you choose, you should expect to pay between $35 to $50 a month. You may be able to bundle your payments into an annual package for greater savings at the cost of a higher initial expense.

8. Living Expenses

The cost of your food, accommodations and living expenses on the road have to factor into your operating expenses. This helps you get a clearer picture of what you’re really spending to be in business. If long-hauling is your goal, be sure to consider the added cost of living on the road for weeks at a stretch before you choose to specialize in this niche.


Plan ahead for your owner-operator costs with a detailed budget and spreadsheet. Set limits in both your professional and personal spending to maximize how much you retain from each job. Ultimately, truckers have to be apt at business as well as driving if they want to make the most out of their careers. Luckily, Truckbase is here to help with plenty of success tips, software and tools you can rely on to turn your business into a profitable trucking company. Schedule a demo today to see how Truckbase can help.

Schedule your demo today to understand how Truckbase can help.

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