Everything a gig app pays you is revenue, not profit. Before you count on it, work out what an hour of your gig work pays after costs and tax. Subtract what your miles cost and a set-aside for self-employment tax, then divide by every hour you were logged in, waiting included.
Skip that math and a $600 week with 22 hours of trips looks like $27 an hour. The real figure can be less than half that, because the payout leaves out three things.
The first is your car. Driving costs you fuel, maintenance, tires, insurance, and resale value, and the payout subtracts none of it. The IRS builds its standard mileage rate from the fixed and variable costs of running a car, which makes it a fair stand-in for the whole bill. It’s also what you can deduct for each business mile.
The second is tax. Nobody withholds self-employment tax for you, and it takes about 14 cents of every dollar of profit. The third is the time between orders. It’s part of the shift, so it counts even when it pays nothing.
Say that $600 week took 300 miles and 30 hours logged in, 8 of them waiting. At an illustrative 75 cents a mile (check the IRS’s current rate, which it resets every year), the miles cost $225 and leave $375 of profit. Set aside 14% for self-employment tax, about $53, and you have $322 before income tax. Over 30 hours, that’s under $11 an hour.
Now compare it with your number, the least an hour of your time is worth. If the week falls short, quit. If some shifts clear it and others don’t, work only those, and decline any offer that falls below it after you cover its miles. If the car is the problem, switch to gig work that doesn’t need one, like dog walking or online tutoring.
Some gig work clears your number easily, and this math is how you find it. Rerun it whenever gas prices, your car, or the app’s pay changes, because the payout screen won’t tell you when your real rate moves.
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