🛵 Gig Economy · Self-Employed · 2026/27

Uber & Deliveroo
“Payslip” Explained

Uber drivers and Deliveroo riders are self-employed — not PAYE employees. Your app earnings statement isn't a payslip, and tax isn't deducted automatically. Here's what you need to know.

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Tax is NOT automatically deducted from your gig economy earnings

Unlike PAYE employment, Uber and Deliveroo do not deduct income tax or NI from your earnings. You are responsible for setting aside money and paying HMRC through self-assessment. Many new drivers don't realise this until they receive an unexpected tax bill.

PAYE Employment vs Gig Economy Self-Employment

2026/27 tax year

AspectPAYE (Employed)Self-Employed (Gig)
Employment status
Uber, Deliveroo, and most other gig economy platforms class workers as independent contractors. You are responsible for your own tax.
PAYE employeeSelf-employed worker
Tax deduction
No automatic deductions. You must register for self-assessment and complete a tax return each year.
Deducted by employer (PAYE)Self-assessment — you pay HMRC directly
National Insurance
Self-employed workers pay Class 4 NI (6% on profits £13,570–£50,270, 2% above) and Class 2 NI (£3.45/week if profits > £12,570).
Class 1 — employer deductsClass 4 + Class 2 NI
Income tax rate
You can deduct allowable business expenses (mileage, phone, equipment) before calculating your taxable profit.
Basic 20%, Higher 40%Same rates — but on profits, not gross earnings
Payslip / statement
The app statement is NOT a payslip. It shows gross earnings before any tax deduction. You owe tax on top of this.
Monthly payslip from employerWeekly/monthly earnings statement from the app
Pension
You need to arrange your own pension. Consider a SIPP. Any contributions get 20% basic rate tax relief added by HMRC.
Employer auto-enrols youNo auto-enrolment

What expenses can I claim?

Self-employed gig workers can deduct allowable business expenses from their earnings before calculating taxable profit. These are the most common deductible expenses for Uber drivers and Deliveroo riders.

Mileage (car/van)

45p/mile for first 10,000 miles, 25p/mile above. You must keep a detailed mileage log.

Mileage (cycle/e-bike)

20p/mile. Applies to Deliveroo and other cycling riders.

Mobile phone (work %)

The proportion of your phone bill used for work. Keep records of work-related usage.

Food delivery bag / equipment

Thermal bags, chargers, and other equipment purchased for the role.

Helmet, gloves, hi-vis

Protective equipment purchased specifically for work.

Parking and congestion charge

Costs incurred while working — keep receipts.

Accountant fees

If you hire an accountant for your self-assessment, their fee is itself a deductible expense.

Always keep records and receipts. HMRC can ask for evidence up to 5 years after the tax year ends.

How much tax should I set aside as a gig worker?

A rough rule of thumb: set aside 25–30% of your gross gig earnings for tax and NI. This covers:

  • Income tax at 20% on profits above the personal allowance (£12,570)
  • Class 4 NI at 6% on profits between £13,570 and £50,270 (2% above)
  • Class 2 NI at £3.45/week if profits exceed £12,570

Your allowable expenses will reduce your taxable profit, meaning the actual tax bill will be lower than 25% of gross — but it's safer to over-save than under-save. Put tax savings in a separate savings account so it's not accidentally spent.

When do I pay the tax bill?

Self-assessment tax bills are due on 31 January following the end of the tax year. The 2026/27 tax year ends on 5 April 2027. Your first payment on account (advance payment) may also be due — typically 50% of your estimated tax bill paid in advance on 31 July.

If you don't pay on time, HMRC charges interest and potentially penalties. Budget ahead.

What is the trading allowance?

If your gross trading income is £1,000 or less in the tax year, it's covered by the trading allowance and no tax is due. However, if your earnings exceed £1,000, you cannot claim the trading allowance AND expenses — you must choose one or the other (typically expenses is better for most gig workers with genuine business costs).

Official guidance: GOV.UK Self-Assessment Tax Returns and GOV.UK Working for Yourself.

Gig economy tax — frequently asked questions

Do I need to complete a self-assessment tax return as an Uber driver?+

Yes. If you earn more than £1,000 from self-employment in any tax year, you must register for self-assessment with HMRC and complete a tax return each year. The deadline for online returns is 31 January. Register at gov.uk/register-for-self-assessment.

When is the Uber/Deliveroo income threshold for paying tax?+

The first £12,570 of profit (income minus expenses) is covered by the personal allowance and is tax-free. Above that, you pay 20% income tax. Additionally, Class 2 NI is due if profits exceed £12,570, and Class 4 NI starts from £13,570.

Can I claim mileage as an Uber driver?+

Yes — if you use your own vehicle, you can claim the HMRC Approved Mileage Allowance Payment (AMAP) rate: 45p/mile for the first 10,000 miles, 25p/mile after that. You cannot also claim fuel costs separately — the mileage rate covers all vehicle costs. Keep a mileage log.

Is the earnings figure in the Uber app my taxable income?+

No. The figure shown in the Uber driver app is your gross earnings before deductions. To calculate your taxable profit, subtract your allowable expenses (mileage, phone, equipment, etc.) from gross earnings. Tax is then due on the remaining profit above the personal allowance.

What happens if I don't register for self-assessment?+

HMRC can issue penalty notices and charge interest on unpaid tax. Penalties start at £100 for late registration, increasing over time. If HMRC discovers you've been trading without registering, they can charge penalties on unpaid tax going back up to 20 years. Register as soon as you start earning.

Can I set up a limited company as an Uber driver?+

Yes, but it's only worth doing at higher income levels (usually above ~£50,000/year). Running a limited company has additional administrative and accounting costs. Below this threshold, self-employment (sole trader) is usually simpler and can be equally tax-efficient with good expense tracking.

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