The Difference Between a Company Driver and an Owner Operator

Company Driver
A company driver is paid with a W-9 which means taxes such as FICA, Federal and State are withheld from the gross pay. As a rule, company drivers are paid by the mile. Dispatchers would work closely with the driver and coordinate all loads. A company driver does not have to worry about issues like insurance, tolls, fuel costs, lumper fees, maintenance on equipment. The company would coordinate and pay for all those expenses.

Owner Operators
Owner operators are paid by 1099 so the owner operator would have to set up with an accountant to pay quarterly taxes.

As a rule, owner operators are paid by a percentage of the load. The owner operator would also be liable for all cost of operating his equipment while on the road, such as, but not limited to, insurance, fuel, tolls, tires, fuel taxes and yearly highway use taxes etc.

An owner operator maintains their own equipment and needs to provide proof of annual inspections or maintenance documentation when needed.

An owner operator also is required to carry physical damage insurance, non-trucking liability and in some cases a worker’s compensation or occupational accident policy.

Below is how Norsemen Specialized Division handles owner operator pay and expenses:

  • The owner operator is paid 80% of line haul, 100% of fuel surcharge and 100% of any accessorial.
  • We provide a fuel card for owner operators so the owner operator could take advantage of our fuel discounts if they want and the fuel is deducted from settlement.
  • We have an insurance company to work through to provide physical damage, non-trucking liability and occupational accident coverages and the cost of these items are deducted from settlement.
  • We do license your equipment with our fleet and ask for $300.00 down at time of sign on and the balance is taken care of in settlement deductions.
  • Since we license your equipment, we do all fuel tax reporting and pay for those taxes to the appropriate states. We then do your fuel tax based on your MPG and deduct from settlement.
  • Our owner operators have the ability to use our national tire account and those expenses are taken from settlement.
  • We have 4 different dispatch locations and each one will work with the owner operator with different customer freight. At this time however, we are not a force dispatch company.
  • At year end, we provide the owner operator with a 1099 along with a breakdown of all expenses that were run through settlement.