How much to save for taxes: DoorDash drivers' 25–30% rule
Gig income records · 1099 tools · mileage tracking · tax set-aside
Kronos is an iOS money app for gig workers and freelancers. KronosPay LLC is a financial technology company, not a bank or lender. This is the most-asked money question in r/doordash_drivers — “How much to save for taxes?”, “What would you say is a good rule of thumb?” — and the answers that hold up are consistent.
Why this happens
As a 1099 contractor, nothing is withheld from Dasher payouts. You owe income tax plus self-employment tax (15.3% covering Social Security and Medicare) on net profit — but net profit is after deductions, and mileage is usually the big one. That's why “30% of deposits” overshoots for full-time drivers with heavy mileage, while “20% of everything” undershoots for dense short-delivery markets. Reddit's working consensus — and most CPAs — lands at 25–30% of net as the practical band.
What to do about it
- Each week, move 25–30% of that week's net (deposits minus tracked expenses) into a separate savings account you don't touch.
- Track mileage as you drive — the IRS rate multiplies fast, and it's usually your largest deduction. A verified log beats a guess at audit time.
- Know the quarterly estimated-tax deadlines (April, June, September, January); underpayment accrues penalties even if you pay in full by April 15.
- Keep the year's 1099-NEC forms and your own per-week records together — the forms report gross, your records prove the deductions.
- Adjust the percentage once a quarter against actual profit — the band flexes with your mileage mix.
Income records, mileage, receipts, 1099 tools, and tax set-aside.
If you're switching apps anyway
The discipline is the hard part, which is why it belongs in an app: Kronos records Dasher income alongside mileage and receipts, organizes 1099 documents, and holds your tax set-aside percentage so “save 30%” is a setting, not a Sunday-night guilt ritual. (Estimates for planning, not tax advice.)
Gig income records · 1099 tools · mileage tracking · tax set-aside
Frequently asked questions
Do DoorDash drivers really owe 30% of earnings in tax?
Not literally — 25–30% of net is a savings rule to cover income tax + self-employment tax with margin. Actual bills vary with total income, state, and deductions; the band exists so the April number is never a shock.
Should I save a percentage of gross or net?
Net (after mileage/expenses). Saving on gross over-reserves for high-mileage drivers — though over-reserving is the cheaper mistake.
What happens if I didn't save anything all year?
You'll owe income + self-employment tax plus possible underpayment penalties. Options: pay what you can by April 15, request an IRS payment plan, and start the set-aside habit now so next year is different.
Is there an app that sets aside DoorDash taxes automatically?
Kronos keeps a tax set-aside percentage alongside your Dasher income records and mileage — the percentage is yours to set and see. (Organization and estimates, not tax advice or filing.)
General educational information only; not financial, tax, legal, or investment advice. App behaviors and pricing change — verify current details on the official product page.