Today, self-employed workers are abundant.
People no longer have to work demanding hours and can choose when they work.
The profession that benefits from these independent contractors is the delivery service industry.
DoorDash is one of the best food delivery services that exist.
Now people can hire help with grocery shopping or regular food deliveries with the click of a button.
DoorDash Drivers, or Dashers, have found ways to turn this side gig into a respectable career, but is DoorDash worth it after taxes?
If you wish to make DoorDash a career, we implore you to keep reading.
Table Of Contents
What Do DoorDashers Have to Do?
How does the average day look for a DoorDash Dasher?
DoorDash has an organized system that manages the number of drivers placed in a single area.
The process of finding work is simple, and there are two options to navigate the system.
The first is working off the “Dash Now” option.
When you first open the app, there is a button that finds quick work to pick up if you’re looking for something fast.
The only negative aspect of this system is that it can automatically disable if there are enough workers in your area.
It will prevent other drivers from accepting more jobs.
The second option is scheduling ahead of time.
In doing so, you have a better chance of securing work hours.
DoorDash has recently created promotions to give Dashers incentives to pick up more jobs.
Peak Pay offers more money to drivers who work during the lunch rush or specific times of the day (i.e., peak hours) that need more drivers than usual.
Challenges are tasks given to drivers to complete.
Based on criteria and skills, drivers can receive specific challenges to complete within a timeframe to earn extra income.
It is a creative process that gives those looking for a challenge and invites more drivers to work.
DoorDash Drive is for catering orders.
Only Dashers with excellent ratings and proven to deliver over 100 deliveries qualify.
There is no set limit to how much you can work for DoorDash.
All Drivers are self-employed and choose the hours they want to drive.
The company urges drivers to schedule their shifts ahead of time.
There are time slots that only allow a certain number of drivers to work.
This avoids situations where there are too many drivers but not enough jobs.
The best way to schedule driving hours is by understanding when demand is high.
Usually, drivers will be looking into regular times for the lunch rush and evening dinners.
How Much Do Dashers Get Paid?
There is a model that DoorDash uses to pay its drivers.
There is a base pay rate that guarantees pay with every DoorDash delivery.
Before, the number fluctuated based on tips received, but now, this is the minimum DoorDash pay a driver receives.
It ranges between 2 and 10 dollars.
The promotional incentives, such as challenges and peak pay, add to the base pay.
With tips, Drivers earn 100% of any extra money given by the customer.
According to DoorDash, the average pay rate for a delivery driver is about $23.
Other sources and drivers shared their average salary was about $15.
The amount of pay you receive is dependent on many factors.
For example, expenses used to perform the job.
This includes the area, how often people are willing to order, the timeframes a driver chooses to work, and excellent customer service that generates more tips over time.
There is potential to make a living, but one must consider the big picture before making this a stable career choice.
What Expenses Do Dashers Have?
One key responsibility of being a DoorDash Dasher is keeping track of your expenses.
Being in charge of your hours and flexibility also means that you are self-financing the things that will keep you operating when on the road.
Unless you plan on making deliveries on a bike, equating the amount of gas consumed for your deliveries is essential.
The amount of gas used is dependent on the number of deliveries you make and how much you’re willing to spend.
Gas is a big part of when it’s time to do your taxes, so keep track of your spending with a log of mileage and receipts during your established business hours.
Working near an area with toll roads is also something to consider. Navigation systems are now able to scout toll-less paths.
If you’re looking to be efficient as possible, pocketing some change for toll can go a long way.
Some advice would be to collect physical coin change given by some customers.
Some people prefer tipping their drivers, and they can work as toll money.
If you find yourself in an area that passes through several highways or tolls, investing in a toll pass is ideal.
Other food delivery stores demand that you have the proper uniform and car topper when making deliveries.
It’s the best perk about DoorDash: You are a free agent.
What customers like in a driver are good timing and good customer service.
Other accessories are not essential, but more about presentation and minimal ways to be efficient.
A phone charger on deck keeps your phone from dying, and you won’t have to struggle navigating through the streets.
A pocket light is also good to own during night shifts.
Investing in an insulated bag to keep food warm is also helpful.
Dashers who are very committed to their work keep spare plates and napkins in their vehicle.
This can improve your services and gain more trust with customers.
If you work in a city, there may be parking fees that come into play.
Some advice for drivers is to calculate the distance between yourself and the drop-off.
If you know that it won’t take long, park close by and make a quick delivery.
If the destination is within an office building or complex, be ready to pay extra parking fees.
How Much Taxes Do Dashers Pay?
Are you wondering how to pay taxes as a Doordasher?
As an independent contractor, DoorDash taxes will look a little different from regular income tax.
How Independent Contractor Taxes Work
Self-employed DoorDash Dashers pay their FICA (Federal Income Insurance Contributions) alongside their standard federal taxes.
FICA covers social security taxes (6.2%) and Medicare taxes (1.45%).
As an independent contractor reporting self employment tax these are required.
There is also no withholding.
Since Drivers submit claims as self-employed, DoorDash doesn’t withhold any taxable income.
This leads to a higher bill from the IRS.
Consider sales tax in your area as well.
To summarize, a DoorDash driver pays roughly 15.3% of taxes.
How Do You File Taxes as a Dasher?
When tax day comes around, a delivery driver who earns more than $600 a year through DoorDash will receive a 1099-NEC form to list payments received.
It isn’t complex to fill out a 1099 form, but we listed a quick step-by-step guide to know what information a Dasher must have once tax season comes around:
Fill out Nonemployee Compensation.
This is the most important box on the form as it reports the total number of earnings from the previous year.
Write off expenses and track deductions.
Keeping track of each business expense is a good habit.
In the case of a DoorDash Driver, these are the expenses that qualify for tax deductions:
- Phone & Phone accessories
- Health Insurance
- Hot Bags & Courier Backpacks
- Roadside Assistance
Is Door Dash Worth It After Taxes?
There is no easy answer as it all depends on the driver’s preferences and what they want out of the experience.
To summarize main takeaways from this discussion, here is a pros and cons list of what being a DoorDash Driver entails:
Tax expenses are deductible.
The amount of equipment and mileage used during business hours can help reduce the taxes you’ll have to pay, so keep track of your spending!
If you consider yourself very independent and like setting your own schedule, this is not a bad option.
No one will tell you what to do, and you’ll have control over how to operate.
You get what you put in.
The amount of pay you earn reflects the efforts you give.
Self-employment taxes are time-consuming.
Without the help of a tax advisor or online software, filing your taxes can take a while and can lead to inaccurate and missing information.
You don’t get your taxes automatically deducted.
You are in charge of providing all the necessary information.
Like any other job, being a DoorDash Dasher has its ups and downs, but there is potential to make a living with the right work ethic.
Taxes can be mind-numbing at first, but with practice and repetition, it’s manageable.
Do you think it’s worth it?
Leave your thoughts and experiences in the comments below!