At Status Transportation, we want you to succeed in your goal of becoming an owner operator. For this reason, we think is important for you to consider the following expenses associated with the process of being your own boss.
When you go from company driver to owner operator trucking, whether it be leasing or just flat-out buying a truck, there are going to be some expenses that you may have not even thought about as a company driver.
If you have ever been to the Great American Trucking Show or follow some of the speakers from the show you are probably already familiar with Kevin Rutherford. He is a great advocate educating yourself as an owner operator in order to be more successful. Part of that education is to learn how to calculate your cost to run your truck per mile. That way you’ll be able to identify where your money is going and control the costs of running your business. Having a clear understanding of these topics will be of great benefit in planning for the future so you can achieve your both your personal and professional goals in owner operator trucking.
Not to oversimplify the equation, but calculating your cost per mile is subtracting your costs from your income and dividing it by the number of miles you ran during a particular period. Experts recommend doing this by the month.
COST PER MILE = (Income - Costs)/Miles
But in order to get a clear idea of what your cost per mile is, first you have to identify what your expenses are. The following is a list of the most common owner operator expenses, the list is divided into fixed costs and variable costs.
- Truck Payment
- Trailer Payment
- Liability Insurance
- Bobtail Insurance
- Cargo Insurance
- Health Insurance
- Cell Phone Service
- Tractor/Trailer Tires
- Truck Wash
- Miscellaneous Expenses
Owner Operator Tags, Permits, Taxes, and Insurance.
When you become an owner operator, you are going to be paying not only for your truck, but owning a truck means that you're also going to be paying for bobtail insurance, tractor insurance, and possibly trailer insurance if have your own trailer or if you are renting a trailer. You'll also be buying base plates or license plates, and paying your 2290, which is a heavy road use tax. Your 2290 will be around $550 a year per vehicle.
As an owner operator truck driver you will have to start paying a fuel tax. That can be offset by buying fuel in the states that you travel through. If you buy fuel in just about every state you go through you usually don't have to pay a whole lot of taxes, it can be just a few dollars depending on how you run.
Now there are some owner operator jobs where they pay for such things as your base plates or your permits. Each company is different so you're going to have to ask a lot of questions if you're interested in hiring on to the company.
Owner Operator Trucking Qualcomm and E-Log Fees
In some cases depending on the company you lease on to you may have to pay for a Qualcomm, which is where you e-logs are on. There could be a satellite fee also associated with that. Although nowadays you can use e-logs apps directly on your phone.
Payment Card Fees
If the company you lease to uses comdata, there is going to be comdata fees. There's going to be fees whenever you take money off the comdata card. Whenever the owner operator trucking company loads money onto your comdata card, they may charge you what's called a wire fee for putting money on your card. There are several fees associated with Comdata and probably also with the other payment cards that are out there.
If you use Transflo or TripPak services to send in your bills or scan them in you'll be paying for that TripPak or Transflo now because you're an owner operator. This is another fee that you have to pay for not to mention such things as scale tickets if you weigh your loads, you are going to be paying for those now and the company does not have to reimburse you anymore.
Keeping Track of Expenses while on the Road
Handling receipts in owner operator trucking can be a daunting task if you don’t have a strategy. Using a 21 pocket expanding folder and labeling it can help you to keep track of all those fuel, toll, and scale receipts. You can get the folder at Walmart, Office Depot or any major office supply store. The next step is to label each one of the pockets with the expense categories listed above.
Every time you get a receipt file it in the correct category and make sure to keep the white copy. White copies usually last longer than any other type and only one copy of each receipt. You’ll easily be able to keep a year’s worth of paperwork that will make it easier for you to file your taxes at the end of the year. Your accountant will love you for it.
Also, very important, don’t forget to write down your odometer reading at the beginning of the month. Send yourself a reminder, or set an alarm on your phone so you won’t forget. This way you’ll be able to calculate your cost per mile during the month and at the end of the year.
As you can see owner operator trucking jobs require more than just to hop on the truck and start driving. You need to be on top of your game by being organized and keeping track not only of your owner operator pay but also tracking your expenses. The flipside of doing this is that you will have better control of your money and reap the benefits of doing so.
For more tips on how to succeed in owner operator trucking and everything related to owner operator jobs, subscribe to the Status Transportation blog today!