How Much to Charge for Delivery: Per-Mile Rates, Flat Fees, and a Simple Formula
How much to charge for delivery as a small business: what a delivery really costs you per mile and per stop, five ways to set the fee, worked examples, and when to outsource the route.
To work out how much to charge for delivery, add up what the trip costs you in driver time and vehicle miles, then choose a fee structure that recovers it: a flat fee, a per-mile rate, delivery zones, or free delivery above a minimum order. For most local businesses the true cost of a single delivery is far higher than a dollar or two per mile, because the driver’s time costs more than the fuel.
The number you settle on has to do two jobs. It has to cover your costs, and it has to be simple enough that a customer says yes. This guide covers both.
Key takeaways
- A delivery costs you driver time plus vehicle miles, and you pay for the return trip too.
- The IRS business mileage rate is 76 cents per mile for the second half of 2026. It’s a useful benchmark for vehicle cost, and it doesn’t include the driver.
- Per-mile pricing is easy to explain, but it undercharges on short trips unless you add a base fee.
- Zones and flat fees are easier for customers and work well when most orders are close by.
- Batching stops into one route is the biggest lever for lowering your cost per delivery.
What Does a Delivery Actually Cost You?
Every delivery has two costs that scale with the trip, and a few that don’t.
Driver time. This is usually the largest piece. Count the whole job: loading, driving there, finding parking, walking the order in, waiting for someone to sign, and driving back. Use the driver’s full hourly cost, including payroll taxes, not only the wage. If the driver is you, your time still has a price.
Vehicle cost per mile. Fuel is the visible part. Depreciation, insurance, maintenance, and tires are the larger part. Two benchmarks help:
- The IRS standard mileage rate for business use is 72.5 cents per mile for January through June 2026 and 76 cents per mile for July through December 2026 (IRS).
- AAA’s 2026 Your Driving Costs study puts the average cost of owning and operating a new vehicle at $12,863 a year, averaged over five years and 75,000 miles (WXYZ Detroit). That works out to about 86 cents per mile at 15,000 miles a year.
A cargo van costs more per mile than a small car, so use your own numbers if you have them.
Fixed costs. Insulated carriers, commercial auto insurance, ordering software, and the occasional parking fee or ticket don’t change with distance, but they have to be recovered somewhere.
A Simple Formula for Delivery Cost
Here is the calculation for one delivery:
Delivery cost = (driver cost per hour × hours on the job) + (round-trip miles × vehicle cost per mile)
Take an example. The numbers are illustrative, so swap in your own.
- A drop-off 8 miles from your shop, so 16 miles round trip
- One hour on the job in total: 25 minutes each way, plus 10 minutes to park and hand over the order
- A driver who costs you $20 an hour
- A vehicle cost of 76 cents per mile
| Cost | Calculation | Amount |
|---|---|---|
| Driver time | 1 hour × $20 | $20.00 |
| Vehicle | 16 miles × $0.76 | $12.16 |
| Total | $32.16 |
That delivery costs about $32. Measured against the 8 miles the customer sees, it’s roughly $4 per mile, not 76 cents. This is why businesses that charge a dollar a mile lose money on delivery without noticing.
How Much to Charge Per Mile for Delivery
If you want to charge by distance, don’t use a per-mile rate on its own. Use a base fee plus a per-mile rate:
- The base fee covers the fixed part of every trip: loading, parking, and the handoff.
- The per-mile rate covers driving time and vehicle cost for each mile.
With the example numbers above, the 10 minutes of parking and handoff cost about $3.33 in driver time, and each mile from the shop adds roughly $3.60 once you count both directions and the driver’s time on the road. A fee of about $3.50 plus $3.60 per mile would recover the full cost.
Most businesses don’t charge the full amount, and that’s a decision, not a mistake. You might recover half through the fee and build the rest into your prices. What matters is that you know the real number first.
Five Ways to Structure a Delivery Fee
| Model | How it works | Best for | Watch out for |
|---|---|---|---|
| Flat fee | One price for every delivery in your area | Dense local delivery, simple checkout | Long trips cost you more than you collect |
| Base fee plus per mile | A starting fee plus a rate for distance | Wide service areas, large or custom orders | Harder to quote without a calculator |
| Zones | Two to four rings or ZIP code groups, each with a set fee | Florists, bakeries, caterers with a clear home area | Zone edges need a clear rule |
| Free over a minimum | No fee once the order passes a set amount | Wholesale and catering, where order size varies | The minimum has to be high enough to cover the trip |
| Built into the price | Delivery is included, and prices are set to cover it | Subscriptions such as meal prep | Hides the cost from you unless you track it |
Many businesses combine two of these: zones with a free-delivery minimum, for example.
Rush and difficulty surcharges are reasonable as well. Same-day orders, deliveries outside business hours, stairs with no elevator, and long waits at the door all add real time.
Delivery Fees by Type of Business
The right structure depends on what you’re delivering and how the order was sold.
Catering. Orders are large, timing is strict, and the driver often carries trays in and sets them up. Many caterers use a distance-based fee with a minimum, or a percentage of the order with a floor. If setup takes 20 minutes, charge for it. See how we handle catering delivery in Nashville.
Bakeries. Everyday orders suit zones. Wedding and tiered cakes are a different service: slow driving, careful handling, and sometimes assembly at the venue. Quote those individually. Our guide on how to transport a cake explains why they take longer, and bakery delivery covers the service side.
Florists. Zone pricing by ZIP code is the norm, with extra for hospitals, venues, and timed deliveries. Holidays change the math, since a Valentine’s Day route may carry several times the usual stops. See florist delivery.
Meal prep. Delivery is usually built into the subscription or charged as a small flat fee, because every customer gets a delivery every week. The route is dense, so the cost per stop is low if you plan it well. See meal prep delivery.
Wholesale. Free delivery above a minimum order is common, with a fee or a pickup option below it. Set the minimum from your cost per stop. If a stop costs you $15, a $40 order can’t ride free. See wholesale delivery.
How to Lower Your Cost Per Delivery
Before raising the fee, look at the cost.
Batch stops into routes. One delivery per trip is the expensive way to work. Suppose a driver makes five stops in a two-hour loop of 30 miles. At the same example rates, that’s $40 of driver time and $22.80 of vehicle cost, or about $12.50 per stop instead of $32.
Set delivery windows. “Thursday between 2 and 5” lets you group orders by area. “Whenever you want it” sends a van across town for one box.
Tighten the delivery area. The last few miles of a wide service area cost the most and often bring the fewest orders. In Nashville, a trip from East Nashville to Franklin can take 40 minutes or more each way in traffic. Price that zone accordingly or deliver there on set days.
Match the vehicle to the load. A cargo van costs more per mile than a car. Use it when the order needs it.
Count failed deliveries. A customer who isn’t home costs you a second trip. Confirm the address and the contact before the driver leaves.
Do You Charge Sales Tax on Delivery Fees?
It depends on your state, so check before you set up your checkout.
In Tennessee, delivery charges are part of the sales price. The Tennessee Department of Revenue’s guidance is that shipping and delivery charges added to an invoice are taxable if the item sold is taxable and exempt if the item is exempt (Tennessee Department of Revenue). Ask your accountant how that applies to your products.
When to Use a Delivery Service
Running your own deliveries makes sense when volume is steady, stops are close together, and you have someone to drive. It stops making sense when:
- A driver and vehicle sit idle most of the week and are overwhelmed on your busy day.
- Orders outgrow one vehicle, or need a bigger one than you own.
- You’re the driver, and delivery takes you out of the kitchen or the shop.
- Customers expect tracking and proof of delivery that you can’t easily provide yourself.
With a delivery service you pay per route, so the cost follows your order volume. The comparison is straightforward: work out your own cost per delivery with the formula above, then compare it with a quote for the same route.
You can get a delivery cost estimate for a real pickup and drop-off in a minute, and use it as the benchmark for your own fee. If you’re new to outsourcing, our explainer on last-mile delivery covers how it works.
Frequently Asked Questions
How much should I charge per mile for delivery?
Start from your costs. Vehicle cost alone runs around 76 cents per mile on the IRS rate for late 2026, and driver time typically adds several times that once you count the return trip. A base fee plus a per-mile rate recovers costs more accurately than a per-mile rate alone.
What is a reasonable delivery fee for a small business?
One that covers a meaningful share of your real cost and that customers in your area will accept. Calculate your cost per delivery first, then decide how much to charge as a fee and how much to build into prices.
Should I offer free delivery?
Only above an order size that covers the cost of the trip. Free delivery isn’t free to you. It moves the cost into your prices or your margin.
How do I calculate a delivery charge?
Multiply the driver’s hourly cost by the total time for the job, add round-trip miles multiplied by your vehicle cost per mile, and then add a share of fixed costs such as insurance.
Is it cheaper to deliver myself or use a delivery service?
It depends on volume and density. Your own driver is cheaper when the day is full of closely spaced stops. A delivery service is often cheaper when volume is uneven, since you pay only for the routes you run.
Do I charge for the return trip?
You pay for it, so your fee has to account for it. Either build it into your per-mile rate or include it in your flat or zone fee.
The Bottom Line
Charge for delivery based on what a trip costs you in time and miles, not on a guess. Work out your cost per delivery, pick a structure your customers can understand at a glance, and lower the cost by batching stops before you raise the price. Then compare your number with a delivery estimate for the same route and see which way comes out ahead.
