Calculate your minimum profitable freight rate per kilometer
(Insurance, Registration, Permits)
(Your personal wage before tax)
(Variable costs per km driven)
(Buffer for business growth)
Calculation Summary
Annual Depreciation:
Total Annual Costs:
Break-even Rate: /KM
Recommended Charge Rateper KM
function calculateOwnerRate() {
var vehiclePrice = parseFloat(document.getElementById('vehiclePrice').value);
var vehicleLife = parseFloat(document.getElementById('vehicleLife').value);
var fixedCosts = parseFloat(document.getElementById('fixedCosts').value);
var desiredSalary = parseFloat(document.getElementById('desiredSalary').value);
var variableRate = parseFloat(document.getElementById('variableRate').value);
var annualDistance = parseFloat(document.getElementById('annualDistance').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
if (isNaN(vehiclePrice) || isNaN(vehicleLife) || isNaN(fixedCosts) || isNaN(desiredSalary) || isNaN(variableRate) || isNaN(annualDistance) || isNaN(profitMargin)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Calculations
var annualDepreciation = vehiclePrice / vehicleLife;
var totalVariableCosts = variableRate * annualDistance;
var totalAnnualExpenses = annualDepreciation + fixedCosts + desiredSalary + totalVariableCosts;
var breakEvenRate = totalAnnualExpenses / annualDistance;
var finalRate = breakEvenRate * (1 + (profitMargin / 100));
// Display
document.getElementById('outDepreciation').innerHTML = "$" + annualDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('outTotalAnnual').innerHTML = "$" + totalAnnualExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('outBreakEven').innerHTML = "$" + breakEvenRate.toFixed(2);
document.getElementById('outFinalRate').innerHTML = "$" + finalRate.toFixed(2);
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Owner Driver Rates
Becoming an owner-driver is a popular path for transport professionals looking for independence. However, many fail because they set their rates based on competitors rather than their own actual business costs. To remain sustainable, you must account for every cent that leaves your pocket, from fuel and tires to the eventual replacement of your vehicle.
The Components of a Transport Rate
Your rate is generally divided into three main categories:
Fixed Costs: These are "standing costs" that you pay regardless of whether the truck moves. This includes comprehensive insurance, public liability, vehicle registration, and permits.
Variable Costs: These expenses fluctuate based on the distance you travel. Fuel is the largest variable cost, followed by tires, oil changes, and general wear and tear.
Depreciation: Often overlooked, this is the cost of your truck's value decreasing over time. You must "recover" the purchase price of the vehicle during its working life so you have funds to buy a new one when the old one is retired.
Practical Example: Delivery Van Case Study
Imagine you purchase a delivery van for $60,000 with a 5-year lifespan. Your annual depreciation is $12,000. Your annual fixed costs (insurance/rego) are $8,000. You want a salary of $70,000. If you drive 80,000 KM per year and your fuel/maintenance costs $0.35/km, your total annual costs are $118,000. To break even, you must charge at least $1.47 per KM. Adding a 15% profit margin brings your recommended rate to $1.70 per KM.
Why Include a Profit Margin?
Your salary is your payment for working. Profit is the payment for your business. Without a profit margin, you have no buffer for unexpected breakdowns, dry spells in work, or the ability to invest in better equipment. Most successful owner-drivers aim for a margin between 10% and 25% depending on their niche.