Sep 28, 2026
The award rate is not the true cost of a driver. Once super, leave, workers compensation and long service leave are counted, a full-time semi-trailer driver in NSW costs about $72,088 a year, or $42.73 for every hour actually worked, against an award rate of $29.00 an hour.
Whether you employ drivers, engage owner-drivers or are one, price the labour at its full cost first, then add the truck.
Truck drivers employed in the road transport and distribution industry are covered by the Road Transport and Distribution Award 2020 [MA000038], except while doing long-distance work. From the first full pay period on or after 1 July 2026, the Fair Work Commission’s 2026 Annual Wage Review increased modern award minimum wages by 4.75% (Fair Work Ombudsman, Annual Wage Review 2026).
The driver’s grade depends on the vehicle. The table shows the heavy-vehicle grades most relevant to line-haul and distribution work.
Grade | Vehicle driven (Schedule B) | Weekly rate (38 hours) | Hourly rate | Casual hourly (incl. 25% loading) |
6 | Articulated vehicle with more than three axles and GCM over 22.4 t; rigid and heavy trailer over 22.4 t to 53.4 t GCM | $1,102.00 | $29.00 | $36.25 |
7 | Double articulated vehicle up to 53.4 t GCM, including B-doubles | $1,118.00 | $29.42 | $36.78 |
8 | Rigid and trailer(s) or double articulated vehicle over 53.4 t GCM, including B-doubles | $1,150.50 | $30.28 | $37.85 |
9 | Rigid or articulated vehicle with trailer combinations over 94 t GCM | $1,169.70 | $30.78 | $38.48 |
Source: MTA SA, Road Transport and Distribution Award Wage & Classification Schedule, 1 July 2026, which reproduces award clause 17.1 and Schedule B.
Cross-check. These figures match the award’s official 1 July 2025 rates increased by 4.75%, rounded to the nearest 10 cents. For example, Grade 6 was $1,052.00 a week from 1 July 2025 (Fair Work Commission, MA000038 clause 17.1), and $1,052.00 × 1.0475 = $1,101.97, published as $1,102.00. Always confirm current rates in the Fair Work Ombudsman pay guide.
Long-distance work is different. Drivers on long-distance operations (interstate trips over 200 km, or return journeys over 500 km) are covered by the Road Transport (Long Distance Operations) Award 2020 [MA000039] while doing that work. That award uses different pay methods, including cents per kilometre, so the figures in this article apply to local and short-distance work only.
The award also sets overtime (150% for the first 2 hours, then 200%), weekend penalties (150% Saturday, 200% Sunday) and allowances such as a $41.03 per day travelling allowance and dangerous goods allowances, which add to the cost when they apply.
The award rate is only the starting point. An employer also pays super, leave loading, workers compensation and long service leave, and pays for weeks when the driver is on leave rather than on the road.
Item | Rule | Source |
Annual leave | 4 weeks paid a year (5 for some shiftworkers) | |
Annual leave loading | 17.5% of the minimum rate on annual leave (or weekend penalties, if greater) | Award clause 24.4 |
Personal/carer’s leave | 10 days paid a year | National Employment Standards |
Family and domestic violence leave | 10 days paid a year, when needed | National Employment Standards |
Public holidays | Paid day off; 8 national days plus state holidays | National Employment Standards |
Superannuation | 12% of ordinary time earnings, paid with wages from 1 July 2026 (Payday Super) | |
Workers compensation (NSW example) | Road Freight Transport – Short Distance: 10.440% of wages plus 0.044% dust diseases contribution; Long Distance: 9.230% plus 0.004% | icare 2025–26 rates, held for 2026–27 |
Long service leave (NSW example) | 2 months (8.67 weeks) after 10 years, about 0.867 weeks a year | |
Payroll tax (NSW example) | 5.45% of wages above $1.2 million a year (2025–26) |
icare has frozen its industry rates for 2026–27, so the 2025–26 rates above apply to NSW policies issued or renewed from 30 June 2026 (icare, Premium updates 2026–27). Workers compensation, long service leave and payroll tax all vary by state; the NSW figures are an example.
The calculation below includes every entitlement that accrues each year for a full-time driver working ordinary hours. Entitlements that arise only in particular circumstances are listed after the table. It uses the rules in the table above; the only assumptions are those stated.
Annual cost | Grade 6 (semi-trailer) | Grade 8 (B-double over 53.4 t) |
Wages: weekly rate × 52 (includes paid annual leave, personal leave and public holidays) | $57,304.00 | $59,826.00 |
Annual leave loading: 17.5% × 4 weeks | $771.40 | $805.35 |
Superannuation: 12% of wages plus leave loading | $6,969.05 | $7,275.76 |
Workers compensation: 10.484% of wages plus leave loading (NSW short distance) | $6,088.62 | $6,356.59 |
Long service leave provision: 0.8667 weeks a year (NSW) | $955.07 | $997.10 |
Total annual cost | $72,088.14 | $75,260.80 |
Total as a percentage above base wages | 25.8% | 25.8% |
Award hourly rate | $29.00 | $30.28 |
Cost per productive hour (1,687.2 hours) | $42.73 | $44.61 |
Productive hours are 38 hours × 44.4 weeks: 52 weeks less 4 weeks’ annual leave, 2 weeks’ personal leave (10 days, assumed fully used) and 1.6 weeks for the 8 national public holidays. Most states have more public holidays, which would raise the cost per productive hour further.
The example assumes that the annual leave loading is ordinary time earnings, which the ATO’s view supports unless the loading relates to lost overtime (atotaxrates.info, citing SGR 2009/2). It applies workers compensation to wages and leave loading only; icare’s definition of wages can include other items, so the actual premium may be higher, and it varies with claims history and incentives.
Not included, because they depend on the job: overtime, weekend and shift penalties, allowances (such as travelling, meal and dangerous goods), paid family and domestic violence leave and compassionate leave when taken, notice and redundancy pay on termination, payroll tax (only above the state threshold), recruitment, training, licences and medicals, uniforms, and the cost of the truck itself. Each of these increases the real cost of an employee driver.
An owner-driver’s rate has to pay for two things: the truck, and the driver. It is easy to price the truck and underprice the driver. The employee cost above shows what the driver’s labour is really worth once every entitlement is included.
Owner-drivers are now the dominant business type in road freight. At June 2025, 40,759 of Australia’s 65,225 road freight businesses (62.5%) had no employees, up from 26,531 in June 2021. They also have the lowest survival rate: only 45.6% of non-employing road transport businesses trading in June 2021 were still trading four years later (ABS, Counts of Australian Businesses, 8165.0, data cubes 2 and 4, December 2025 release).
Employee entitlement | Owner-driver position |
4 weeks’ paid annual leave plus 17.5% loading | No pay when not driving; holidays must be funded from the rate |
10 days’ paid personal leave | No pay when sick; income protection or savings needed |
Paid public holidays | No pay on public holidays unless working |
12% super paid by the employer | Owner-driver funds their own super, unless paid wholly or principally for labour (see below) |
Workers compensation cover | May have no cover unless deemed a worker under state law or privately insured |
Long service leave | None |
Truck supplied by the employer | Owner-driver pays finance, depreciation, fuel, tyres, maintenance, registration and insurance |
Overtime, penalties and allowances | Only if the rate includes them |
Super. The ATO treats an independent contractor who is paid wholly or principally for their labour as an employee for super purposes, even if they have an ABN; super is then payable on the labour component of their invoice (ATO, Super guarantee eligibility). The contract must be with the individual, not through a company, trust or partnership (ATO, Super from your employer). Whether an owner-driver supplying their own truck meets that test depends on the contract, so check with the ATO’s employee or contractor tool or an adviser.
The minimum sustainable rate covers three layers:
Fuel is the most volatile layer. The ACCC reported average diesel in the five largest cities rising from 176.6 cents a litre on 20 February 2026 to 322.4 cents on 31 March 2026, and it was 286.8 cents on 23 September 2026 (ACCC Weekly fuel price monitoring report, 24 September 2026). An owner-driver on a fixed rate absorbs that change directly, while an employee’s wage does not move with the fuel price.
The Freight Metrics Truck Operating Cost Calculator calculates the truck layer, and the Freight Metrics drivers wages calculator covers the labour layer.
The comparison works both ways. A transport business deciding whether to employ a driver or engage an owner-driver needs the same numbers as an owner-driver deciding what to charge.
Using the Grade 6 (semi-trailer, NSW) figures from the worked example:
Scenario | Annual labour cost | Hours worked | Labour cost per hour |
Employee driver, all entitlements, typical leave taken | $72,088.14 | 1,687.2 | $42.73 |
Owner-driver matching that income but taking the same leave | $72,088.14 | 1,687.2 | $42.73 |
Owner-driver matching that income with no leave at all | $72,088.14 | 1,976.0 | $36.48 |
Award hourly rate alone | — | — | $29.00 |
Hours for the no-leave row are 38 hours × 52 weeks. Labour costs per hour are calculated from the figures shown.
The gap between the award rate ($29.00) and the full labour cost ($42.73) is $13.73 an hour, or 47%. An owner-driver who prices their time at the award hourly rate is effectively giving away super, leave, workers compensation and long service leave. The only way to close that gap without raising the rate is to work every week of the year, which means going without holidays.
\text{Employee option} = \text{Full employee cost} + \text{Own truck cost} + \text{Supervision and admin}
\text{Owner-driver option} = \text{Owner-driver’s quoted rate} \times \text{Hours or kilometres}
An owner-driver quote below the employee option can look like a saving. If it is also below the owner-driver’s own full cost, the arrangement is unlikely to last, and the business risks losing the contractor or facing legal exposure (see the next section).
An owner-driver can check a rate offer in three steps:
Choosing between an owner-driver and an employee is a commercial decision, but the label on the contract does not decide which one a driver legally is.
Sham contracting is unlawful. Under section 357 of the Fair Work Act 2009, an employer must not misrepresent an employment relationship as an independent contracting arrangement. In one case, a company that told seven bus drivers they were independent contractors when they were employees was ordered to pay $252,120 in penalties, and its director $47,784 (Fair Work Commission, Misrepresenting employment). In March 2026 the ATO and the Fair Work Ombudsman said they were stepping up action on sham contracting, naming road freight among the industries of concern (Staffing Industry Analysts, 13 March 2026).
Owner-drivers now have minimum-standard protections. Since 26 August 2024, the Fair Work Commission can set minimum standards for regulated road transport contractors and make road transport contractual chain orders that bind businesses along the contracting chain (Fair Work Commission, Regulated worker standards). When setting road transport standards, the Commission must be satisfied the order will not unduly affect the viability or competitiveness of owner-drivers.
The first order dealt with fuel. The Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 started on 21 April 2026 after the fuel price surge (Fair Work Commission). It required parties in road transport contractual chains to adjust rates fortnightly or twice a month so contractors recovered the increased cost of fuel, with those obligations applying from 21 April to 7 June 2026 (Victorian Government guidance). The Fair Work Amendment (Fairer Fuel) Act 2026 also lets the Commission set standards more quickly during sudden disruptions (Fair Work Ombudsman).
Future orders may cover payment times, fuel levies, rate reviews, cost recovery and termination (Coleman Greig Lawyers). Transport businesses that engage owner-drivers, and owner-drivers themselves, should monitor active cases before the Commission.
This section is general information, not legal advice. Operators should get advice on how their own arrangements are classified.
All sources accessed 28 September 2026. Calculations in the worked example are based on the figures shown.