The worked example
A contractor is paid $90 flat plus $1.10 a stop and $0.40 a package. The route has 120 stops and 160 packages, takes 10 hours and covers 95 miles, so it pays $286.00. Fuel is $3.70 a gallon at 15 mpg, which is $23.43. Maintenance is $0.10 a mile and depreciation $0.12 a mile. Tolls and parking are $6 and a reserve for tickets and damage claims is $8.
The van payment of $650 and insurance of $300 a month are $11,400 a year. Spread over 5 routes a week for 48 weeks, that is $47.50 on every route you drive, including weeks off.
| Line | Per route |
|---|---|
| Total costs | $105.83 |
| Cost per mile | $1.11 |
| True profit before tax | $180.17 |
| Profit per hour before tax | $18 |
| Profit per stop | $1.50 |
| Take-home after a 25% set-aside | $135.13 |
| Take-home per hour | $13.51 |
That is $676 a week and $32,430 a year. The route needs about 9.7 stops just to cover its costs.
What the route has to pay
To take home $18 an hour after the set-aside, the route has to pay costs plus $18 × 10 hours ÷ 0.75, which is $345.83. At $286.00 this route is short, however busy it feels.
Comparing two offers
A second offer pays a flat $260 for 90 stops in 9 hours and 70 miles. It takes home $14.15 an hour against $13.51 for the first, but across the year the first puts $32,430 in your pocket and the second $30,570, because there are fewer hours in it. The better hourly rate is not always the better year.
Run your own numbers: open the calculator.
Common questions
How do I work out whether a delivery route is worth driving?
Subtract every cost of running the van on that route from the route pay: fuel for the miles, maintenance and depreciation per mile, tolls and parking, a reserve for tickets and damage claims, and the van payment and insurance spread over the routes you actually drive. What is left is true profit. Divide by the hours on the road and then take out your tax set-aside to get a real hourly take-home.
How do I include the van payment and insurance in each route?
Add the monthly van payment or lease and monthly insurance, multiply by 12, and divide by routes per week times weeks per year. A van that works 5 routes a week for 48 weeks carries each route's share of the full year of payments, including the weeks you do not drive.
How many stops do I need to break even on a route?
Break-even stops are the stops at which route pay equals route costs: the costs left after any flat route pay, divided by what each stop pays including its share of per-package pay. Miles are held fixed, so treat it as a guide for a route of this length.
Should I take the route that pays more per hour or more per year?
Look at both. A shorter route can pay more per hour worked yet put less in your pocket across the year if it fills fewer hours. The compare mode shows take-home per hour and per year for both offers side by side.