How it works
A gig driver's true net hourly is what remains of platform payouts once vehicle costs and tax obligations are subtracted, then divided by every hour spent working — and it is routinely half the number the app flashes at end of shift. Three adjustments do the work. Vehicle costs arrive per mile, not per delivery: fuel plus maintenance and depreciation on 350 weekly miles at $0.35 combined removes about $122 before anything else. Taxes are nobody's withholding but yours; gig platforms send a 1099 with nothing held back, so a 20% set-aside on profits is the minimum honest reserve against self-employment tax and income tax alike. And hours must count the whole shift — waiting for offers is work, which is why engaged-time math flatters the platform. Run the defaults — $320 across twenty-five hours looks like $12.80 per hour — and the true figure lands near $6.16: $192.50 of pre-tax profit becomes $154 after the reserve. The number reframes decisions instantly: accepting lowball offers, dead-mile commutes between hotspots, or a second app's bonus chase all price differently against $6 than against $13. Drivers who track these inputs monthly consistently report the single biggest earnings gain comes not from driving faster but from cutting miles per dollar earned.
Formula
Net hourly = (payouts − miles × (fuel + maintenance) ) × (1 − tax%) ÷ all hours online
Tips
- Log real miles for two weeks including deadheads — estimates run low by a third.
- The IRS standard mileage rate (70¢ for 2025) doubles as an all-in cost sanity check.
- Set the tax reserve aside weekly in a separate account; April arrives regardless.
- Decline offers below roughly $1.50 per mile — they lose money once costs are counted.
- Track net hourly monthly; if it trends under local minimum wage, renegotiate your strategy.
Frequently asked questions
- How much does DoorDash really pay per hour after gas?
- With the default profile — $320 over 25 hours, 350 miles at $0.35 combined vehicle cost — gross is $12.80 but true net lands near $6.16 after expenses and a 20% tax reserve. Dense urban markets with short trips can beat this substantially; long-suburban routes fall well below it.
- Can gig drivers deduct mileage from taxes?
- Yes — drivers choose either the IRS standard mileage rate (70 cents for 2025) covering fuel, depreciation and maintenance, or actual-expense accounting with receipts. Miles must be logged contemporaneously; app screenshots of route summaries generally satisfy documentation. The deduction applies only to business miles, never commuting from home.
- How much should delivery drivers set aside for taxes?
- Twenty to thirty percent of net profit covers most part-timers' combined self-employment and income tax; full-time earners in high-tax states should lean toward the top of that range. Because platforms withhold nothing, quarterly estimated payments are required once annual liability exceeds about $1,000 to avoid penalties.
- Is gig delivery worth it after vehicle costs?
- Run your own numbers honestly: many drivers discover effective pay sits near local minimum wage once depreciation counts, making it worthwhile mainly for schedule freedom or as gap-filler income. The lever that matters most is miles per dollar — accepting dense, short-trip offers lifts net hourly more than any bonus chase.
- Do waiting hours count when calculating gig pay?
- They should. Platforms often advertise engaged-time rates excluding time waiting between offers, which inflates hourly figures by 20–40%. Dividing total payouts by every hour you were available to accept work gives the honest denominator — the one your rent check ultimately cares about.