Cost Per Kilometre Guide for Australian Owner-Drivers
How to calculate your true cost per kilometre (CPK) as an Australian owner-driver. Factor fixed and variable costs into one number that tells you exactly which loads are worth taking.
Cost per kilometre (CPK) is the single most important number in your trucking business. It is the full cost of moving your truck one kilometre, and it is the baseline that determines whether any load you are offered is actually profitable.
Most Australian owner-drivers know their fuel cost per kilometre. Far fewer know their total cost per kilometre. That gap is where profit gets lost.
This guide explains how to calculate your true CPK by breaking every cost into fixed and variable categories, then combining them into one figure you can use before accepting any load.
Why Cost Per Kilometre Matters More Than Any Other Number
When a customer offers you a rate for a load, the only way to judge that rate properly is to compare it against what it costs you to run the truck.
A load paying $2.80 per kilometre sounds great if your fuel only costs $0.80 per kilometre. But if your total CPK is $2.50, you are making 30 cents per kilometre before you pay yourself.
A load paying $1.90 per kilometre sounds ordinary, but if your CPK is $1.50 you are making 40 cents per kilometre in profit.
Rate per kilometre means nothing in isolation. CPK is the reference point that makes every rate meaningful.
Fixed Costs vs Variable Costs
Your total CPK is made up of two types of cost: fixed costs and variable costs.
Fixed costs run whether your truck moves or not. They include finance repayments, insurance, registration, licensing, and basic overheads like phone and accounting. You pay these costs even if the truck sits in the yard for a month.
Variable costs change with how much you drive. They include fuel, tyres, maintenance, repairs, tolls, and some permits. The more kilometres you drive, the higher these costs go.
To get your CPK you divide your fixed costs by your annual kilometres and add them to your variable cost per kilometre.
Step 1 — Calculate Your Annual Fixed Costs
Start by listing every fixed cost you pay over a year. These are the costs that do not change with your kilometre count.
Truck finance repayment: $40,000 to $70,000 per year depending on the truck and finance term.
Insurance: $15,000 to $25,000 per year for comprehensive truck, public liability and goods in transit cover.
Registration: $3,000 to $6,000 per year depending on your state and vehicle configuration.
Licences, medicals, and permits: $1,000 to $2,000 per year.
Phone, accounting, and basic admin: $2,000 to $4,000 per year.
Add these up to get your total annual fixed costs. For many semi-trailer owner-drivers this figure lands between $65,000 and $110,000 per year.
Step 2 — Choose Your Annual Kilometre Estimate
Your fixed cost per kilometre depends on how many kilometres you drive. The more you spread those fixed costs over, the lower the fixed cost per kilometre.
At 100,000km per year: $80,000 in fixed costs = $0.80 per kilometre.
At 150,000km per year: $80,000 in fixed costs = $0.53 per kilometre.
At 200,000km per year: $80,000 in fixed costs = $0.40 per kilometre.
Be realistic. Overestimating your annual kilometres will make your CPK look lower than it really is, and that leads to accepting underpriced loads.
Step 3 — Add Your Variable Cost Per Kilometre
Variable costs are directly tied to driving. Here is a realistic breakdown for a semi-trailer in Australia in 2026:
Fuel: $0.70 to $0.90 per kilometre depending on consumption, load, and terrain. At 35 litres per 100km and $2.20 per litre this is $0.77 per kilometre.
Tyres: $0.04 to $0.07 per kilometre across steer, drive, and trailer tyres.
Maintenance and repairs: $0.08 to $0.13 per kilometre depending on the age and condition of the truck.
Tolls: $0.02 to $0.05 per kilometre averaged over a year. Some routes are much higher, others are zero.
Add these together to get your variable cost per kilometre. For a typical semi-trailer this usually lands between $0.90 and $1.15 per kilometre.
Step 4 — Combine Fixed and Variable CPK
The formula is straightforward:
Total CPK = (annual fixed costs divided by annual kilometres) + variable cost per kilometre
Example for a typical Australian owner-driver:
Annual fixed costs: $80,000
Annual kilometres: 150,000km
Fixed cost per kilometre: $0.53
Variable cost per kilometre: $1.00
Total CPK: $1.53 per kilometre
This is your break-even operating cost. Any load paying less than $1.53 per kilometre is losing money on a per-kilometre basis before you take a wage.
A Worked Example for an Australian Owner-Driver
Let us say you run a 2020 prime mover with a single semi-trailer on interstate freight. You drive 150,000km per year and your annual costs look like this:
Finance: $55,000
Insurance: $20,000
Registration: $5,000
Licences, medicals, and permits: $1,500
Phone and accounting: $3,000
Total fixed costs: $84,500
Fuel: $115,500 (150,000km at $0.77/km)
Tyres: $7,500 ($0.05/km)
Maintenance: $15,000 ($0.10/km)
Tolls: $4,500 ($0.03/km)
Total variable costs: $142,500
Total annual cost: $227,000
Total CPK: $227,000 divided by 150,000km = $1.51 per kilometre
This means your minimum sustainable rate, before you take home any personal income, is $1.51 per kilometre. Add your target profit and personal wage on top of that to get your real minimum rate.
How to Use CPK in Real Load Decisions
Once you know your CPK you can assess any load instantly. Divide the offered rate by the loaded kilometres to get the rate per kilometre.
A $2,760 load over 1,200km pays $2.30 per kilometre. If your CPK is $1.51 you have $0.79 per kilometre in gross margin before your wage and profit.
A $1,920 load over 1,200km pays $1.60 per kilometre. If your CPK is $1.51 you have only $0.09 per kilometre in gross margin.
The second load is not necessarily a rejection if you have no better options, but it is clearly a marginal job. It is certainly not a job to accept at face value without knowing the exact costs and the return load situation.
Common CPK Mistakes Owner-Drivers Make
Underestimating annual kilometres. This makes your fixed cost per kilometre look artificially low. Use your actual average over the last 12 months, not your optimistic target.
Forgetting finance and insurance. These are often the two largest fixed costs. If you only count fuel and maintenance your CPK will be dangerously low.
Ignoring empty kilometres. Your CPK is a cost for every kilometre, not just loaded kilometres. If a load forces you to drive 300km empty, that empty distance carries the same CPK.
Not updating for fuel price changes. A move from $2.00 to $2.40 per litre on a 35L/100km truck adds $0.14 per kilometre to your variable cost. That is a significant change that can turn a profitable load into a loser.
TruckProfit Calculates Your CPK in Real Time
You can maintain a spreadsheet and recalculate your CPK every month. But the easier way is to let TruckProfit do it automatically.
TruckProfit tracks your fixed and variable costs on every load you calculate. Over time it builds an accurate picture of your real CPK based on your actual expenses, not estimates. When you enter a new load, the app compares the offered rate per kilometre to your CPK and tells you immediately whether to accept, negotiate, or walk away.
If you are not sure of your CPK, start with the calculator. Enter your best estimates. As you use it more, your numbers will become more accurate and your load decisions will become faster and more profitable.