Owner-Operator Costs of Doing Business: Essential Expenses to Consider

Being an owner-operator offers a flexible schedule, work autonomy, and the ability to earn a good living. However, understanding the costs involved is crucial for profitability. Here is a breakdown of essential expenses every truck driver should know.

1. Fuel Expenses

Fuel is the largest expense, costing $50,000–$70,000 annually.

Tip: Control speed, find your engine's "sweet spot" (1250–1350 rpm), and use fuel cards to save.

2. Truck Purchase or Lease

Whether buying or leasing, this is a major fixed monthly cost. Don't forget to budget for maintenance once the truck is paid off.

3. Maintenance and Repair

Budget about 10% of your overall expenses for maintenance. Preventive maintenance acts as insurance against costly breakdowns.

4. Insurance

You need both Truck Insurance (mandatory minimums + cargo) and Health Insurance. As a self-employed individual, health premiums may be tax-deductible.

5. Taxes

Plan for Self-Employment Tax (15.3%) and Income Tax. Quarterly estimated payments are often necessary to avoid penalties.

Additional Costs

• Licensing & Permits: IFTA, UCR, heavy vehicle tax, etc.
• Food/Living: Use a per diem deduction and cook on the road to save.
• Broker Fees: Typically 10–20% per load if you use brokers.
• Factoring: 2.5–5% fee to get paid faster on invoices.

Maximizing Profitability

• Track revenue and expenses accurately.
• Use a TMS (Transportation Management System) to automate paperwork.
• Invest in preventive maintenance to extend equipment life.