Delivery and rideshare apps make it easy to earn extra money, but they usually do not withhold tax. Understanding taxes for delivery drivers early prevents a painful bill at the end of the year. This guide focuses on the US, with notes for the UK, Canada and Nigeria.
You are usually self-employed
Most delivery and rideshare drivers are independent contractors. That means you report your earnings as business income, pay income tax and self-employment tax, and can deduct business expenses. Platforms may send tax forms summarising your earnings, but you must report all income even if you do not receive a form.
Self-employment tax
In the US, self-employment tax covers Social Security and Medicare. It is roughly 15.3% of most of your net profit, on top of income tax. You can deduct half of it when calculating income tax.
The biggest deduction: your car
| Method | How it works | Good for |
|---|---|---|
| Standard mileage rate | Multiply business miles by the IRS rate per mile | Most drivers, especially with efficient cars |
| Actual expenses | Deduct the business share of fuel, repairs, insurance and depreciation | Expensive vehicles with high running costs |
Track every business mile with an app or logbook, including driving to pickups. Personal trips do not count.
Other deductions for delivery drivers
- The business share of your phone and data plan.
- Insulated bags, phone mounts and chargers.
- Parking fees and tolls while working.
- Platform fees, where not already deducted.
Quarterly estimated taxes
Because no tax is withheld, you may need to make quarterly estimated payments. Set aside 25% to 30% of your profit in a separate account. Estimate your bill with our Freelance Tax Estimator and read our guide to quarterly estimated taxes.
Example
A driver earns $18,000 in a year and drives 15,000 business miles. Using the standard mileage rate, the mileage deduction could cut taxable profit dramatically, often to a fraction of gross earnings. Without tracking miles, the driver would pay tax on far more income than they actually kept.
Track your gig income
If you work for several apps, track each platform separately to see which pays best per hour after costs. Use our Side Hustle Income Tracker.
Country notes
- UK: register for Self Assessment if your income exceeds the trading allowance; you can claim simplified mileage or actual costs.
- Canada: report business income and claim the business portion of vehicle expenses; GST/HST registration may apply above the small supplier threshold.
- Nigeria: earnings are generally subject to personal income tax; keep records of income and vehicle costs.
Insurance reminder
Personal car insurance may not cover you while working. Check whether you need rideshare or business-use cover with our Insurance Cost Estimator.
A weekly money routine for delivery drivers
A short weekly routine keeps taxes for delivery drivers under control:
- Export earnings from each app every Sunday.
- Record business miles from your tracking app.
- Move 25% to 30% of profit to a separate tax account.
- Save receipts for parking, tolls and supplies.
- Check your hourly earnings after costs to decide which apps and times to prioritise.
This takes about 15 minutes a week and prevents a stressful tax bill. It also shows whether driving is actually worth your time once fuel, wear and tax are included.
For official, up-to-date guidance, see the IRS Gig Economy Tax Center.
Frequently asked questions
Do I have to pay taxes on DoorDash or Uber income?
Yes. Gig income is taxable, and you must report it even if you do not receive a tax form.
Can I deduct gas if I use the mileage rate?
No. The standard mileage rate already includes fuel; choose either mileage or actual expenses.
How much should a delivery driver save for taxes?
Many set aside 25% to 30% of profit after expenses.
Taxes for delivery drivers: key takeaways
- Most drivers are self-employed and pay self-employment tax.
- Track every business mile; it is usually the biggest deduction.
- Set aside 25% to 30% of profit for tax.
- Check whether you need quarterly payments and business insurance.
Last reviewed: October 2026. This article is general education, not personal financial, tax or legal advice. Rules, rates and limits change, so check official sources or speak to a qualified professional before making decisions. See our Financial Disclaimer.