Self Employed--- Cost per km travelling.

Hey guys, Just interested in what you charge customers per kms! Been offered a good sign contract in Auckland. And want to not over or under charge my kms! I know 77c is IRD recommendation for businesses to pay their employees.

I will be using a AU Wagon and may be towing a trailer or cherry picker.

I think there's some info on the AA website!

my company charges out $1.25 per k

I would suggest you work out your actual cost per km and just charge that, plus whatever you wish to cover your time while traveling if you want to include that as well.

I generally just whip up a quick spreadsheet with:

Wof
Licensing
Insurance
Depreciation
Maintenance (Don't forget things like tyres in maintenance)
+ Anything else I have forgotten (slow brain day)
+ Don't forget to include the trailer costs as well

Then I just divide that over my total expected annual km's (that would be this contract's km's plus any other estimated running for other contracts, personal etc. otherwise you are double dipping )

Then add the estimated fuel cost per km, don't forget it will be higher towing the trailer.

That's the only real way of doing it if you want an actual fair and accurate figure to use. The IRD figures etc are all just generalisations and there are far too many factors involved for a one size fits all situation.

If you are concerned about it looking too high, it may even be appropriate to share your spreadsheet with your customer (depending on your relationship with them) and then they should understand that you are being very fair and transparent and not using it as an excuse to grab extra margin.

Best of luck with that, give me a hollar if you want to work it this way and get stuck.

Just one other note, make sure you are generous/realistic with your maintenance estimate. This should be reflective of the older vehicle, I usually look at my actual expected maintenance over say 5 years plus a bit for unexpected repairs then divide it by 5. This is usually a mini spreadsheet in itself with tyres, coolant, brakefluid, oil, air, fuel, filters, brakes, belts, wiper blades, misc, etc etc. Its O.K in my opinion to charge things at a workshop rate if you want, even if you do maintenance yourself, as that then covers your time.

Remember you may have to charge a bit more for maintenance on the old car but you charge much less for depreciation.

This incidentally is one of many reasons why its good to track your actual vehicle costs over time too.

i usually just charge for the time as if i was working one way to cover costs

I have used 80c/km for years, for a car, but if I was towing a cherry picker (or other capital assets), I'd be charging more.In your case, 77c sounds low, but a lot also depends on the distances you are doing.I never charge at all where my total mileage for the day is less than 50.

My choice as to whether or not I also charged travel time.North Shore to Hamilton or Te Kuiti for example, I certainly charged my time, but not to Penrose or West Auckland.

I was charging$2 kmas I wasin refrigservicegame .

I pay, and personally get 62c/km - behind the times but I reckon it covers my costs - virtually no depreciation

I have been charging 77 cents running similar car

I get paid 68c per km at the moment. Reviewed every 3 months for fuel price changes. And I'm actually making a little margin on that.
However our business IS driving, about 800-1000km per week around town so the fixed costs per km drop hugely. If your only driving to and from a job the the IRD rate of 77c is about right depending on car.

Ok cheers guys, If towing a cherry picker fuel usage is pretty much doubled. usually get a little over 300kms per tank 60litres. I usually do about 2500kms a month but with the new contact that will increase a fair bit. The travel is usually about 35% with the cherry picker