Uber Driver Salary
This post summarizes potential income from Uber driver salary based on my experience. It also has a quick formula for tax calculations.
Salary for UberX Drivers
- Uber driver salary is based on fares from Uberx trips, minus 20% fee from Uber and $10 weekly Uber phone fee.
- Normal hourly Uber driver salary in Boston are about $15-25 dollars an hour without the Uber surge pricing. Airport runs can boost my hourly Uber driver salary to $30/hr as UberX drivers get an extra $8.50 to drop off or pickup at the airport to cover tolls.
- In the mornings with 1.5-2x Uber surge pricing, my Uber driver salary was $30-40 an hour on UberX.
- Uber surge pricing of 2-3x during Friday or Saturday nights (1-2am in Boston as bar last call is 1am), my Uber driver salary was $50-60 an hour.
If you are an opportunist, you can make a few hundred a week on Uber by working very key hours on UberX.
Taxes for Uber Drivers
You will need to file for taxes (1040SE) regardless of your Uber driver salary. This will go under self employment income, subject to self employment taxes (social security and medicare)
You will get a 1099-K if you received over $20k in Uber fares (your Uber driver salary) and given over 200 rides.
A 1099 would make your life easier as you just use this form to fill out your taxes. If you do not receive one, you will need to calculate your Uber driver salary. Use your Uber driver salary to fill out 1040SE.
Generally, it is easiest to deduct these items:
- Mileage on your car (read below on instructions). (This is in place of actual car expeditures, such as car maintenance, repairs, and gas)
- Mobile Phone fees (note: it is recommended you get another mobile phone with data just for Lyft, Uber and Sidecar so you can deduct the entire phone bill, or you will need to itemize how much for personal use or business purposes)
- Cost of things you give to your passengers (for example: water, gum, coffee, cookies (or supplies to make them))
Just as a disclaimer, I am not a tax professional and any numbers and calculations below are just for reference only and cannot be directly applied to all situations.
So the first step is to look at your marginal tax rate. Here are the rules for singles for year 2013. Look at this website for other filing situations (http://taxes.about.com/od/Federal-Income-Taxes/qt/Tax-Rates-For-The-2013-Tax-Year.htm):
- 10% on taxable income from $0 to $8,925, plus
- 15% on taxable income over $8,925 to $36,250, plus
- 25% on taxable income over $36,250 to $87,850, plus
- 28% on taxable income over $87,850 to $183,250, plus
- 33% on taxable income over $183,250 to $398,350
So for example, I am in the 25% range including the fares I receive from Uber driver salary as taxable income. Here is the calculation:
First you need to take care of the self employment tax, which is at 15.2%. However, half of that is tax deductible, which means you can deduct this amount from your gross Uber driver salary to get your taxable income. You can also claim a deduction on the mileage of your car. I choose to take the mileage calculation as its much easier to track, compared to keeping track of all your gas and other car expenses for deduction.
Half of the self employment tax applies to your gross income (Uber driver salary). Below is the formula I used to calculate my tax rate:
- G1 is my total Uber driver salary for the year.
- M1 is my mileage for the year
- T1 is my marginal tax rate (taking into account all your total income for the year, including Uber/Lyft/Sidecar)
- 0.56 is the federal mileage rate
- 0.0765 is 1/2 of the self employment tax for 2013
My tax rate for my Lyft salary and Uber driver salary is hovering around 25%. With more Uber driver surge pricing, that number goes up as my Uber driver salary to mileage ratio is much higher. This tax rate was based on 25% marginal tax rate. You could estimate your own tax rate by adjusting your tax rate accordingly based on your marginal tax rate.
Your take home Uber driver salary after taxes and Uber/Lyft 20% fee from your hourly wage is about 60% of any fares you take in on any given day. This can go up or down depending on the Uber surge pricing and your own tax rate.
General Tax Tips
A note about self employment income:
It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.
So make sure to keep track of your Uber driver salary. You will need to report your Uber driver salary if you don’t get a 1099.
Make sure to have good notes before attempting to claim a deduction on the mileage for your Uber driver salary. If you are looking to earn a sizable Uber driver salary (>$20k), I would highly recommend you claim a deduction. This year, I have been taking more careful notes whenever I drive on Uber so I can claim mileage as the tax deduction. Take note that self employment deductions are the most audited part of any tax return so make sure you have the records to back up your deductions.
Disclaimer: I am not a certified tax consultant so any information above is purely for reference only. Please speak to a certified tax professional about your specific tax situation.