A simple rule for gig workers: app payout minus operating expenses minus taxes equals approximate take-home pay.
IRS rules matter, but tax deductions are not the same thing as the real economic cost of running a car for work.
That is why headline hourly earnings can overstate what a driver actually keeps.
For gig drivers, the number shown in an app is gross revenue, not spendable income. A workable gross-to-net formula is straightforward: start with app payouts, subtract driver expenses, then subtract taxes. What remains is a closer estimate of gig take-home pay.
The distinction matters because the IRS treats gig income as taxable. Its gig-work guidance says drivers must report income even if they do not receive every information form, and workers with net earnings from self-employment of $400 or more generally must file. Independent contractors may also need to make quarterly estimated tax payments rather than wait until April.
Start with gross, then build a net-income bridge
Think of one week of driving in table form. Assume a driver receives $1,000 from apps. That is the starting line, not the finish line. Next come operating costs: fuel, tolls, parking, cleaning, phone service used for work, and the business share of insurance. Then come vehicle costs that are easy to undercount, especially maintenance, tires, repairs, and depreciation or wear from putting more miles on the car.
If that same driver logs 800 business miles, mileage alone signals why gross earnings can mislead. The IRS standard mileage rate for business use is 76 cents a mile from July 1 through Dec. 31, 2026. That rate is a tax method, not a universal cash-cost figure for every driver, but it captures an important point: using a vehicle for work carries a real cost even when the cash outflow does not show up all at once.
Deductible expense is not always the same as economic cost
Drivers can generally choose either actual vehicle expenses or the standard mileage method, subject to IRS rules. Under Schedule C instructions, workers using the standard mileage method multiply business miles by the allowed rate and then add parking fees and tolls, but they do not separately deduct depreciation and other operating costs already built into that method.
That tax treatment should not be confused with personal cash flow. A driver who uses the mileage method may still feel the expense later through a repair bill, lower resale value, or faster replacement of the car. In other words, a deductible method helps with tax reporting, while net earnings analysis asks what the work truly costs.
Taxes apply after expenses, not as a flat cut of gross pay
Self-employment tax is another area where gross figures confuse workers. The headline rate is 15.3%, covering Social Security and Medicare, but it does not simply come off top-line app revenue. The IRS says self-employment tax is based on net earnings from self-employment, and generally 92.35% of those net earnings is subject to the tax. Federal and state income taxes then depend on the worker’s total income, filing status, deductions, and other circumstances.
That means there is no honest universal answer to the question, “What do gig drivers keep per hour?” The right comparison is net profit per hour or per mile after business costs and taxes. Better recordkeeping makes that possible: track miles, keep receipts, separate business from personal driving, and estimate taxes during the year. For gig workers deciding whether a platform, route, or shift is worth it, gross revenue is the ad. Net earnings are the paycheck.