Why gross pay misleads gig drivers
Apps show what you were paid. They do not show that you also paid for gas, oil changes, tires, repairs, and the value your car lost with every mile. Those costs come out of your pocket, and they grow with the miles you drive. A job that pays well per hour but needs a lot of miles can leave you with much less than it looks like.
How this calculator works
real hourly pay = profit ÷ hours
Gas cost is miles divided by MPG, times the price of a gallon. Other car costs are the miles times the per-mile amount you enter. For taxes, the calculator subtracts the standard mileage deduction (miles times the IRS rate) from your earnings, then sets aside the percentage you choose.
Taxes and the mileage deduction
Gig drivers are usually treated as self-employed, which means paying both income tax and self-employment tax on profit. You can generally deduct either your actual car costs or the IRS standard mileage rate for business miles, which is 72.5 cents per mile for 2026. The standard rate is meant to cover gas, maintenance, insurance, and wear, so you generally cannot also deduct gas separately. Keep a log of dates and miles. Rules depend on your situation, so check with a tax professional.
How to earn more per hour
- Cut dead miles. Orders close together pay more per mile than long drives for the same fee.
- Track which hours and areas pay best, then work those.
- Keep the car in good shape. Proper tire pressure and regular service protect your MPG.
- Skip orders that pay less than your cost per mile plus a fair hourly rate.
Frequently asked questions
How much should I set aside for taxes as a gig driver?
Many self-employed people set aside around 20% to 30% of their profit, but the right amount depends on your total income, deductions, and where you live. A tax professional can give you a number for your situation.
Should I count waiting time as hours worked?
Yes, for this calculator. Time spent waiting for orders is time you cannot spend elsewhere, so it belongs in your hours.
Can I deduct both gas and the standard mileage rate?
Generally no. The standard mileage rate already includes gas and other vehicle costs. If you deduct actual expenses instead, you track gas, repairs, insurance, and the rest separately.
What other car costs should I include per mile?
Oil changes, tires, repairs, insurance share for business use, and how much the car loses in value. Dividing a year of those costs by a year of miles gives your own figure.