Earnings in hot shot trucking can be a mixed bag, and if you’re just getting started, it’s natural to wonder how much you could realistically make.
The good news is that hot shot trucking offers a lot of flexibility in how you work and what you earn.
Your income depends on a variety of factors, including how often you’re able to find loads, the type of freight you haul, your operational costs, and how efficiently you manage your time on the road.
When you’re just starting out, don’t expect to be rolling in cash right away. New drivers often earn somewhere in the range of $30,000 to $50,000 per year.
In the beginning, you’re likely relying on load boards to find work.
Load boards are essentially online marketplaces where shippers post available loads, and drivers bid on them. While it’s a convenient way to find jobs, the pay can be hit or miss, especially if you’re new to the game and haven’t built a reputation or solid relationships with shippers and brokers. It’s like fishing—sometimes you reel in a great load with high pay per mile, but other times, you’ll settle for whatever’s available just to keep moving.
Let’s imagine you’re driving around 2,500 miles a week, which is a reasonable estimate for a full-time hot shot trucker. If you’re getting paid an average of $1.75 per mile, you could pull in roughly $4,375 each week. Multiply that by four, and you’re looking at around $17,500 a month in gross earnings. Over a year, that could add up to over $200,000 in gross income, which sounds impressive. But here’s where reality kicks in—gross income is not what you take home.
Cost
You have to factor in all the costs of running your hot shot operation. Fuel, for example, is a major expense. If you’re hauling loads across long distances, you’ll be spending a significant chunk of your income at the pump.
Let’s say your truck averages 10 miles per gallon, and you’re driving 2,500 miles a week. If diesel is $4 per gallon, you’re spending around $1,000 a week on fuel alone. Then there’s maintenance—oil changes, tire replacements, and the inevitable repairs that come with wear and tear. You don’t want to skimp on maintenance either because a breakdown on the road can lead to lost income and costly repairs.
Insurance is another big-ticket item. You’ll need liability, cargo, and physical damage insurance, which can cost anywhere from $8,000 to $12,000 annually, depending on your coverage and where you’re operating. Plus, if you’re hauling certain types of loads, like oversized freight, you’ll need special permits that cost extra.
Once all of these expenses are accounted for, that $200,000 in gross income could easily shrink to $70,000 to $100,000 in net earnings, which is still a respectable income for many drivers.
Earnings
For those who’ve been in the hot shot business for a while, earnings tend to be higher. Experienced drivers who’ve built up relationships with brokers or secured contracts with reliable clients can earn closer to $70,000 to $100,000 per year or even more.
These drivers often specialize in niche markets—maybe they’re hauling equipment for oil fields or transporting heavy machinery for construction companies. The more specialized your service, the higher your earning potential.
But what really makes a difference is how well you manage your time. Some hot shot drivers make more by being smart about when and where they haul. If you’re willing to take on last-minute or overnight loads, you could command higher rates.
Drivers who understand the seasons and cycles of the industry—like which times of the year certain loads are more in demand—can capitalize on those busy periods to maximize their income.
Do You Need to Set Up a Formal Entity?
While you can operate as a sole proprietor in hot shot trucking, most experienced drivers opt to form a more formal business entity, such as an LLC (Limited Liability Company), primarily for liability protection. In practice, it’s quite common for hot shot truckers to form LLCs, S-corporations, or even C-corporations as their business grows. Here’s why:
- Liability Protection: An LLC separates your personal assets from your business liabilities. This means if something goes wrong (e.g., an accident or lawsuit), your personal assets like your home and savings are shielded from legal claims against your business.
- Tax Advantages: When you’re a sole proprietor, your income is taxed as personal income, but forming an LLC or S-Corporation may offer you the ability to lower your taxable income through deductions or changing how your income is taxed. For example, with an LLC, you can often deduct business expenses, like fuel, maintenance, and insurance, from your gross earnings. S-Corporations may allow you to avoid paying self-employment taxes on part of your income.
- Professionalism: Having a formal entity like an LLC adds legitimacy when working with brokers, shippers, or large companies. It shows that you’re running a business, not just freelancing as a driver, and can help you secure better contracts.
Taxes for Hot Shot Trucking
Taxes in hot shot trucking, like in other businesses, depend on how you structure your operation. Here’s what to keep in mind:
- Self-Employment Taxes: If you’re operating as a sole proprietor or single-member LLC, you’re required to pay self-employment tax. This includes both the employer and employee portions of Social Security and Medicare, currently totaling 15.3% of your net income.
- Quarterly Estimated Taxes: Since taxes aren’t withheld from your income like a regular job, the IRS requires that you pay taxes quarterly based on your estimated income for the year. This includes both your federal income taxes and self-employment taxes.
- Deductible Expenses: Hot shot truckers have many deductible expenses that can lower their taxable income. Some of these include:
- Fuel costs
- Truck maintenance and repairs
- Insurance premiums (both for the truck and liability)
- Licensing and permit fees
- Office supplies, if you have a home office
- Meals and lodging during long hauls
- Per Diem: Truckers can also use a per diem for meals and incidental expenses, which is a daily deduction that helps reduce tax liability. In 2024, the per diem rate for transportation workers is $69 per day for meals and incidentals within the U.S.
- Depreciation: If you purchase a new truck or trailer, you can claim depreciation on it over several years. Depreciation reduces your taxable income, as the IRS allows you to deduct a portion of the vehicle’s value each year due to wear and tear.
Conclusion
At the end of the day, hot shot trucking is what you make of it. Sure, there are drivers pulling in six figures, but they’ve put in the time to build their business and navigate the ups and downs of the market. If you’re starting out, focus on finding steady loads, keeping your costs down, and building a network of reliable clients. With patience and perseverance, your earnings can grow, and you’ll start to see the benefits of being your own boss in the trucking world.
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