Many of us are looking for ways to make some extra cash for the end of the month. Not only that – but being able to work flexible hours makes a huge difference, both to our wallets and our well-being!
It’s a big reason why working in delivery services has become so popular. From Amazon to Uber and DoorDash, people across the globe are signing up to become food delivery drivers and cyclists. But is it really worth it? For example, is DoorDash worth it after taxes?
In this article, I’ll take you through exactly what DoorDash is, how much you can earn with them, and what you’re expected to do on the job. Let’s get started.
What is DoorDash?
DoorDash is a food delivery service that’s become amazingly popular across the US, Canada, and Australia. For our UK readers, think of it as a stateside equivalent to Deliveroo. People can open their DoorDash apps and order takeout whenever they want – simple!
The great thing about DoorDash is that it works for all kinds of food deliveries. Users can order food from fast food eateries, cafés, restaurants, or even grocery stores – all from the same place. And, as most delivery services work today, DoorDash will bring the order straight to your door.
DoorDash also helps businesses in a big way. Restaurant owners can set the base prices for their menus, and DoorDash takes care of the cost of the deliveries and driver fees. This means that big and small businesses alike can use the service to sell more of their products and reach more people.
And, of course, the products and goods are delivered by the DoorDash drivers, known as Dashers – there’s no need to employ their own staff and pay wages.
What do DoorDash drivers actually do? How does Dashing work?
If you sign up to be a DoorDash driver (a Dasher), you get to set your own schedule detailing the hours you will be free to deliver.
You can set any number of hours depending on whether you want your Dashing to be a full-time or part-time job. You can also log into the app at random points if you have time to work and want to make some extra money.
You can sign up to either deliver using your car, scooter, or even your bicycle – but it’s always best to sign up with a full, clean driver’s license.
A typical DoorDash shift
Let’s take a look at how Dashing works in practice.
When you’re ready to start your shift, you must log into the app, and a list of available orders should appear. You can then choose the order you wish to take and accept it.
It’s worth taking the time to consider it before accepting, depending on your location, timescales requested, etc. Once you have accepted the order, it is up to you to get it from the restaurant or store to the customer. You can use the map function in the app, or simply get to your destination manually.
It’s always worth checking the app for any pickup locations specified by the restaurants. For example, they may want you to pick up from a side door or specific part of the counter to avoid disturbing the customers inside.
Once you get to the restaurant, confirm that you are there on the app by swiping right at the bottom of the app’s screen.
Sometimes, you have to pay for the food using your Red Card (provided by DoorDash), but not always. The app will always inform you whether you have to use your Red Card ahead of time.
Once you have the order in hand, confirm pickup in the app. Then, your next step is, of course, to get the food to the customer!
Use the app to find the quickest and simplest route to their pickup point. When you reach the destination, check the app again to see if the customer has left instructions regarding where exactly they want the food dropped off, how to get into their building, when to call them, etc.
Once you have arrived, swipe right again on the app to confirm that you are at their delivery location.
Once the delivery has been made, confirm it in the app, and other available orders should become available to you, ready to choose from.
It’s important to remember to confirm each part of the delivery process on the app. Once you’ve got this down pat, it’s easier time after time to make money by Dashing!
What are Dasher hours like?
As mentioned, there is no specific set amount of hours you have to work for DoorDash. You are technically self-employed when you deliver on behalf of the company and therefore are free to choose when you want to work, for how long, and how frequently.
That being said, scheduling your shifts in advance is always a good idea. Certain time slots only allow a specific set number of drivers to work. So, even if you may be ready and willing, there may be no opportunity for you to drive if you have not scheduled it beforehand.
As strange as this may seem, it is to ensure that there aren’t situations in which there are too many drivers and not enough jobs available.
Therefore, it’s best to consider when you will be in high demand, i.e., when there are likely to be more people ordering food. With that in mind, most drivers tend to book their slots around meal times, during lunch and dinner rushes.
How much can I get paid as a DoorDasher?
It’s the bit you’ve all been waiting for. According to DoorDash, their drivers can earn about $23 per hour. However, other trusted sources, such as Glassdoor, state Dashers are expected to get around $11 per hour.
If you want to find out what that means in terms of a monthly salary, you can use my hourly-to-monthly salary calculator. If you want to know what it means in yearly terms, you can use the hourly-to-yearly salary calculator instead.
DoorDash pays its drivers in various ways. They get a normal base rate per delivery but also have the opportunity to receive what are known as “promotions” and regular tips.
Let’s take a closer look at how Dashers get paid and what they can do to increase their pay.
Payments per delivery
DoorDash refers to the payments per delivery as the base pay rate. Generally speaking, the base pay rate can be anywhere from around $2 to about $10.
The amount you get depends on the time the delivery takes, the distance you have to go, and even how “urgent” or “desired” the order is.
Promotions
After your base pay rate, you can also claim promotions to top up your fees: Peak Pay, Challenges, and DoorDash Drive.
PeakPay is an amount added to your earnings during busy delivery times. So, generally speaking, you’re more likely to get PeakPay during lunch or dinner rushes.
Challenges are a way to get DoorDash drivers to be a bit more active. Essentially, you are set a goal of completing a certain number of deliveries within a certain amount of time. For example, you could get an extra $20 just for completing the challenge of doing 15 deliveries within the same week.
DoorDash Drive
DoorDash Drive is a handy way of getting extra money for delivering large orders that need specific or even special handling. Drive orders, therefore, pay more than regular ones, and you can get extra money on top of that for arriving on time or early on an order.
That said, DoorDash Drive orders are not available to all Dashers. You must have completed at least 100 deliveries, have a 4.8 average customer rating, and have a 90% completion rate to be eligible.
Tips
Of course, you can also get tips during your deliveries. You get to keep all of your tips as-is, which means they will not affect how much you get paid on your base rate or promotions!
When will I get paid by DoorDash?
DoorDash is fairly flexible when it comes to how and when you receive your payments.
For example, you could opt to get paid directly into your bank account every week. Or, you could have your money paid to you instantly if you need it.
However, this method usually incurs a small fee – it’s worth weighing your options.
How are DoorDashers taxed?
Since you are technically self-employed as a DoorDasher, you are taxed as an independent contractor. This means you are to pay your Federal Income Insurance Contributions (FICA) with the rest of your standard federal taxes.
On the bright side, DoorDash doesn’t keep any of your earnings as taxable income.
However, it does mean that you have to figure out how much you owe based on the area in which you live and work.
Generally speaking, DoorDash Dashers tend to pay just over 15% in taxes.
Filing your taxes as a DoorDasher
When it’s time to pay your taxes, if you have earned more than $600 in that year through DoorDash, you will receive a 1099-NEC form to fill out and list all of the payments you received.
On the form, you will have to fill out the Nonemployee Compensation, write off your expenses, and track deductions.
Thankfully, it doesn’t take too long to fill out the form, nor is it too complicated.
Can I claim expenses as a DoorDasher?
Yes! As a Dasher, you are expected to incur multiple expenses on the job, many of which you can claim back. The expenses you can claim as a Dasher (that you need and use while working) include the following:
- Toll fees
- Gas
- Parking rates
- Accessories and equipment (for your phone, for example)
- Health insurance
- Hot bags and courier backpacks
- Inspections
- Roadside assistance
DoorDash after taxes – is it worth it?
There are both positives and negatives when it comes to Dashing – and while I personally think it’s well worth getting into even after tax, here are a few points you’ll need to consider.
Pros
- Your expenses are tax deductible
- Keeping track of your spending and mileage can help to reduce your taxes significantly
- It’s a great job for people who like working alone and being independent
- You can work flexible hours
- The amount you earn is based on how much you work
Cons
- It can be complex to sort out your self-employment taxes
- Your taxes are not automatically deducted from your pay
- You are responsible for the details you provide and the amount you pay
What you’ll need to start as a DoorDasher
All you need to get started with DoorDash is a valid domestic driver’s license, a clean driving record, and valid insurance.
You will, of course, also need your own vehicle. In most areas, a car is required, but depending on where you are, you could also use a motorbike, bicycle, e-bike, or even a scooter! Then, you can simply download the app and get started!
by Jon Craig
I am the creator of Project Financially Free and I started this journey to both educate myself and share my insights on personal finance. I’m passionate about financial literacy and I invite you to join me on this transformative path. See more.