The Hidden Costs of Driving for Uber
Gas · Depreciation · 15.3% Self Employment Tax
There's a specific kind of disappointment that hits drivers when they do the math. Your weekly deposit is revenue, not income. What you actually keep — after fuel, wear, taxes, and Uber's cut — is a different and smaller number.
What Uber Actually Pays You
Uber takes a service fee on every ride. The general range in 2026 is **20–28%** of the total fare. So if a rider pays $28, you might receive $20.16. You are starting the profitability calculation from a number that's already smaller than what the rider paid.
Fuel, Maintenance, and Depreciation
Fuel is visible, but depreciation is the invisible killer. Every mile you put on your car reduces its resale value. The IRS 2026 mileage rate of **72.5¢ per mile** exists because the government recognises this cost is real. If you drive 20,000 miles for Uber this year, that's roughly $7,000 in vehicle value quietly disappearing.
The Standard Mileage Deduction
For 85–90% of Uber drivers, taking the IRS standard mileage deduction (72.5¢/mile) is vastly better than tracking actual expenses. It covers fuel, oil, maintenance, insurance, and depreciation in one sweep, and heavily reduces your taxable income.
The 15.3% Self-Employment Tax
Because you are an independent contractor, you are responsible for the full 15.3% Self-Employment Tax (Social Security and Medicare). If you've only ever worked W-2 jobs, you're used to paying 7.65% while your employer paid the rest. As an Uber driver, you are both employee and employer.
Check out our detailed Self-Employment Tax Calculator to understand exactly how this burden works and how you can deduct half of it on your Form 1040.
Quarterly Estimated Taxes
The IRS requires gig workers to pay estimated taxes quarterly (April, June, September, and January). If you wait until tax season to pay the whole bill, you will be hit with underpayment penalties. Our calculator figures out exactly how much you should be setting aside into a tax reserve account each week.