How do I calculate cost per mile for my trucking business?
Calculating cost per mile requires adding up every expense tied to running your truck and dividing by the miles you drive. The formula is simple. The challenge is capturing all the costs, not just the obvious ones.
Start with fixed costs. These don’t change based on miles driven but they’re real expenses that need to be spread across your total miles. Include truck payments or lease costs, insurance premiums, permits and licensing fees, and base plate registration. If you own your truck outright, include depreciation because you’ll eventually need to replace it. Trucking companies that skip depreciation end up shocked when it’s time to buy a new truck and the money isn’t there.
Variable costs change with how much you drive. Fuel is the biggest one, usually 25% to 40% of your total cost per mile. Maintenance and repairs add up faster than most owner-operators expect. Tires wear out based on miles. Oil changes, brake jobs, and unexpected breakdowns all factor in.
Then add the costs most truckers forget. Deadhead miles cost money even though you’re not hauling a load. Your phone, ELD subscription, and factoring fees are business costs. If you stay out on the road, meals and lodging add up. And the biggest one people miss is owner compensation. If you’re not including what you need to pay yourself, you’re subsidizing every load you haul.
Track actual expenses, not estimates. Keep receipts and log everything. A QuickBooks bookkeeper in Santa Fe who understands trucking can help you categorize expenses properly so you’re working with real numbers instead of guesses.
Once you have total monthly expenses and total monthly miles, the math is straightforward. If you spent $12,000 and drove 8,000 miles, your cost per mile is $1.50. Any load paying less than $1.50 per mile is losing you money before you even factor in profit margin.
Update your calculation regularly. Fuel prices change. Maintenance costs increase as trucks age. Insurance premiums fluctuate. A cost per mile you calculated a year ago probably isn’t accurate anymore.
Knowing your real cost per mile lets you make smart decisions about which loads to take. When a broker offers $1.80 per mile, you know whether that’s a profitable run or a loss waiting to happen. Without accurate numbers, you’re just guessing.
Santa Fe's Small Business Bookkeeper
The Next Step:
A Quick Conversation
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a straightforward quote.
More Questions
How do I handle progress billing for construction projects?
Set up billing milestones tied to project phases or completion percentages in your contract. Invoice as each milestone is reached, track retainage separately, and record everything in your accounting system so you know exactly where each project stands financially.
Read answerHow much does catch-up bookkeeping cost?
Catch-up bookkeeping is priced by the project based on how far behind you are, transaction volume, and record quality. A few months might run $300 to $800 while a full year could range from $1,000 to $2,500 or more.
Read answerWhat is the difference between a W-2 and 1099?
A W-2 reports wages paid to employees. A 1099-NEC reports payments to independent contractors. The difference depends on your working relationship and determines your tax withholding and filing obligations.
Read answerWhat happens if I file my GRT return late?
New Mexico charges a 2% penalty per month on unpaid GRT, capped at 20% of the tax due. Interest also accrues on the balance. The sooner you file, the less you'll pay in penalties.
Read answerHow do I register for a New Mexico business tax ID?
Register for a CRS ID through the New Mexico Taxation and Revenue Department's online portal. The process is free and typically takes a few business days to receive your number.
Read answerShould owner-operators hire a bookkeeper?
Most owner-operators benefit from professional bookkeeping. The time spent doing your own books is time you're not earning money, and trucking-specific complexities like IFTA and per diem make DIY bookkeeping harder than it looks.
Read answer
