How much to save for taxes: Uber drivers' 25–30% guide
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. Same question as the DoorDash version, different mileage math: rideshare puts more deductible miles under the same 1099 umbrella, so the band shifts with how much you drive.
Why this happens
Uber pays you gross on a 1099-NEC (or via 1099-K reporting changes), with nothing withheld. You owe income tax plus 15.3% self-employment tax on net profit — and for rideshare, net profit shrinks dramatically once mileage is deducted, often 30–50% of gross for full-time drivers. That's why a flat “30% of deposits” rule over-reserves for full-time highway miles and under-reserves for the driver stacking Uber on a W-2 job (their marginal bracket stacks on top). The 25–30%-of-net band is the working consensus from driver forums and CPAs alike.
What to do about it
- Set aside 25–30% of weekly net profit — deposits minus tracked mileage and expenses — into a separate account.
- Log every on-duty mile (waiting for rides counts; commuting to your start zone generally doesn't). Rideshare mileage is the deduction that makes or breaks the math.
- Pay quarterly estimates on the IRS schedule (April/June/September/January) if you'll owe more than $1,000 for the year.
- Keep your 1099s, the Uber tax summary, and your own mileage log together — platform summaries can lag or misstate categorization.
- Re-check the percentage quarterly: heavy-mileage quarters need less reserve than dense-city delivery-style weeks.
Income records, mileage, receipts, 1099 tools, and tax set-aside.
If you're switching apps anyway
Kronos exists for this workflow: Uber income recorded beside mileage and receipts, 1099 documents organized, and a set-aside percentage that stays visible instead of aspirational. (Planning estimates, not tax advice.)
Gig income records · 1099 tools · mileage tracking · tax set-aside
Frequently asked questions
Does Uber withhold taxes for drivers?
No. Rideshare drivers are independent contractors — every payout is gross, and income + self-employment tax are your responsibility via withholding elsewhere or quarterly estimates.
Why do some Uber drivers save less than 30%?
Mileage. The IRS rate times full-time rideshare miles is a massive deduction, so net profit — the taxed number — can be far below deposits. The percentage applies to net, not gross.
Do I pay taxes on Uber income if it's my side gig?
Yes — 1099 income stacks on top of W-2 income at your marginal rate, plus self-employment tax. Side-gig drivers often need the higher end of the band.
What's the mileage rate for 2026?
The IRS sets it annually (67 cents per mile for 2025; verify the current-year figure at irs.gov before filing). Uber's in-app tax summary also applies a rate — your own log is the auditable source.
General educational information only; not financial, tax, legal, or investment advice. App behaviors and pricing change — verify current details on the official product page.