Last Updated on November 24, 2022 by Allard John Keeley
Owner-operator truck drivers’ salary and bonuses
To start with let’s set out the main differences between working as a driver for a company and being an owner-operator who basically runs their own small business. As a driver working for a company, a lot of things get done for you that you might not even think about. You give up control for predictability and stability but often end up with a lower salary.
As an owner-operator, you have the control, which means you’re now responsible for everything from maintenance and insurance to buying new tires, from figuring out how much to spend on a new tractor (it could easily cost you $100K), to doing your taxes and ensuring all licensing requirements and permits are being met. And don’t forget insurance! Plus, you have to look for work. But yes, you can earn a significantly higher income.
In Canada, the average base salary for owner-operators – according to indeed.ca – is just over $160K per year. However, don’t forget you have to deduct all those costs and expenses you’ll face for operating your own rig. So, the net take home is often under $100K. Still, if you’re earning, say $85K a year owning and operating your own tractor-trailer, that’s significantly better than most company drivers. And some owner-operators will easily net more than 100K per year.
Remember, you will really have to earn those salaries as an owner-operator. So, here are a few hacks to help you maximize your earnings.
Go to load boards (websites advertising loads that need transporting, usually with a free section and a subscription section with more offers) and keep your truck busy moving as many loads as possible. You’ll need to sort out who the better brokers are, and that’s partly trial and error.
Really dive in and register a sole proprietorship. You can even hire yourself as an employee with your benefits as deductible expenses. Register your trade (operating) name, get a tax number from Revenue Canada, and open up a business account in your trade name at your bank. You will need an accountant, by the way.
Get cargo insurance to cover damaged, lost, or stolen goods and any other event that might affect your revenue and incur costs.
Find the regions and cities that pay the best rates. You own your own rig. You can go where the money is, even if that means being away from home for longer.
How are you getting paid? If it’s a percentage of load revenue, then you want to be moving high-value goods more often than not. If you’re being paid by the kilometer, your earnings are more consistent, but that high-value payload will earn you just the same as any other load you carry. So, your choice will depend on what types of loads you figure you’ll be hauling, and that could depend on what regions you tend to work in, and who you tend to work for and it will also depend on whether you prefer taking on some risk (percentage payments) or whether you value predictability (mileage payments).
Buy or lease your truck? If you don’t have the cash upfront to outright buy your rig, then you’re basically looking at mortgage payments on a small house, seeing tractors alone can cost around $100K. Do you lease your rig instead and what terms are leasing companies offering you? If you love trucks and think you have the knowledge to sniff out a fair deal on a tractor-trailer, then this part of the game might not be such a huge challenge. However, if you aren’t familiar with the truck market, you might want to accumulate a few years experience driving for a company while you find out as much as you can about trucks and how much they cost to buy and especially how much it costs to keep them running. That will be a huge part of your expenses as an owner-operator and, therefore, a drain on your net income. Never forget that. Always, and that means always, schedule regular maintenance check-ups for your rig and factor that into your expense planning. Or you could end up spending thousands of dollars fixing a problem maintenance would have prevented, all while your truck sits idle in the repair shop. Your choice.
Planning, what is the most money you can make as a truck driver in Canada?
A little basic math. Average revenue and maximum revenue. As an owner-operator your income will vary, especially if you usually get paid on a percentage-of-load-revenue basis. What you want are average annual revenues as high as possible, not just a few killer months and then lots of downtime because your truck blew up or you’re too damn tired and need a rest.
Owner operators, and not company drivers, will usually be the top earners, but not every owner operator will be able to maximize their income from their truck driving. It depends on a few factors, similar to what we listed just above:
How much time are you willing to spend on the road away from home? More time on the road, more revenue.
How much are you willing to pay and how much time are you willing to take to ensure regular maintenance checks? You’ll really need them if you’re running your rig as much as possible. A major breakdown of your rig will always eat up more operating time than a series of regular maintenance checks. That will require planning your maintenance checks to fit into your load-carrying schedule.
Good tax software. Don’t laugh. Nothing eats into your net earnings more than a surprise tax bill from CRA. And if you can schedule quarterly installment payments on your taxes, do it. It will make your earnings more predictable and help you plan your work.
So, what are some of the highest earnings truck drivers can make? According to indeed.ca an owner operator who carries loads for DSL Express Trucking makes over $360K a year. That would be before expenses, but you’re still looking at around $250K per year. That’s a very nice salary.
What does it take to own your own truck driver business in Canada?
If you’re reading this guide, it’s safe to assume you’re more likely interested in starting small and building up your company from a few trucks to something on a larger scale. So, this FAQ will cover how to start a small trucking company in Canada. If you’re seriously interested in starting your own trucking business, ask yourself the following:
- How much experience in trucking do you have and is it in Canada or the US or abroad?
- The surest if not the quickest way, is to drive a truck for at least 2 years, then buy your own truck and work as an owner operator for a couple of years to get to know how the transport industry works.
- If you don’t have much experience, then you had better do some serious research on the industry. But more than that, your research should guide you to a specific segment of the industry.
- What kind of loads will your company be carrying?
- Dry goods, metal tubing, primary products like lumber … what do you want to focus on?
- How many and what type of trucks do you want to start with? A Dry Van, a Flatbed, a Step Deck? It will depend on what you’re carrying and that will depend on what segment you decide to focus on.
- Will you do any LTL (Less-Than-Truckload) jobs?
- Will you focus on Short-Haul within an urban area or Long-Haul between cities?
- If it’s Long-Haul, what Lanes will you focus on? Lanes in trucking lingo mean the dedicated routes/highways between cities that your drivers will be mostly using. This in turn depends on where in Canada you’ll focus your activity.
- How many trucks do you think you’ll need? How many can your budget pay for? Will you buy using a truck loan, or lease?
- What do permits and licensing are you going to need?
- For example, you’ll need a Safety Fitness Certificate from the National Safety Code. If you’ll be operating in more than one province, apply under Federal law. If you’ll be doing business within only one province, then apply under provincial law.
- Your drivers and your company will have to comply with Transport Canada’s Canadian Hours of Service rules – rules prohibiting drivers being on the road without rest for periods deemed dangerous. This means transport companies have to install ELDs (Electronic Logging Devices) to monitor their drivers and ensure they’re not on the road for dangerously long periods.
Canadian Hours of Service Regulations – here’s the government page giving the actual legislation for Hours of Service
- You’ll have to apply for your company’s Commercial Vehicle Operators Registration (CVOR) which is not to be confused with a Commerical Vehicle Operators Record which comes with your truck driving license.
- If you’re planning on doing routes in the US, you’ll need an MC (Motor Carrier) number and perhaps what’s called a DOT (Department of Transport) number.
- What insurance will you need to cover accidents and other events? How can you get a competitive rate so that your insurance costs don’t eat up a significant part of your revenue?
- What type of ownership structure do you want? A Sole Proprietorship? A Partnership? A Corporation is really for larger companies earning lots of revenue, but it’s always an option as well.
- While there are websites that help you find a load, you better be ready for some effort and disappointments when looking for work for your company always keeping in mind how low you want to go to get those first jobs when you’re just building a reputation in the transport industry.
- Be careful here, you might end up charging far too little and get caught in a cash-flow trap and be forced to resort to factoring – having a company take care of your invoices and collecting your bills for you. You’ll get cash up front a little quicker which will help your cash flow, but they will charge a percentage of your revenue.
- And perhaps most importantly: do you have the experience to know how to hire the right drivers for your company? If you don’t, find someone who does. In fact, you could even take a Truck Dispatch Training Course to gain a little experience regarding how to handle your drivers.
- Finally, don’t forget to register as a business with Canada Revenue Agency (CRA) and get your account number with them.
- Yes, you’ll have to pay taxes. GST/HST payroll deductions for your employees, Fuel Taxes, etc.
- You’ll have to register under IFTA – International Fuel Tax Agreement; an interprovincial and intestate agreement on fuel taxes that allows you to pay your fuel taxes in one chosen jurisdiction. You’ll need your IFTA credentials in every province (but not Yukon, Northwest Territories, or Nunavut) and most states (except Hawaii and District of Columbia)
- You’ll also have to register under IRP – International Registration Plan – which like IFTA involves the provinces in Canada and the states in the US. Here the focus is on commercial vehicle registration rather than fuel taxes.
- One final suggestion: as mentioned at the start, it’s often a good idea to first try a few years as an owner-operator driving, maintaining and paying for your truck all by your lonesome self. There’s no better way to get to know shippers, mechanics, and other drivers and really have a good idea of how the business works. Then start your own company buying or leasing extra trucks and hiring drivers.
Truck Drivers in Canada – Table of Contents
Chapter: How to become a truck driver?
Chapter: Truck drivers pay in Canada
Chapter: Urban vs. Rural jobs
Chapter: Truck Driver with Criminal record
Allard Keeley has been a published writer on immigration policy since 2013. Has written for publications like The Federalist. Fluent in Spanish and English. BA Honors Economics Queen’s University in Kingston, Ontario.