How much tax does a full-time delivery driver actually pay?

The number people fear is the one on their platform statement. The number that gets taxed is much smaller, and the gap is almost entirely mileage relief.

A worked example

Take a full-time driver with £28,000 of platform earnings, 14,000 business miles and £900 of other allowable costs, in the 2026/27 tax year with no other income.

Income tax: the first £12,570 is covered by the personal allowance, leaving £8,030 taxed at 20%, which is £1,606.

Class 4 National Insurance: 6% on the £8,030 above £12,570, which is about £482.

Total: roughly £2,088 on £28,000 of earnings. That is about 7.5% of turnover, and about 10% of profit.

Why the effective rate is so low

Two reasons, and both are worth understanding rather than just being pleased about.

The first is that mileage relief is genuinely large. £6,500 of deduction on 14,000 miles is more than most drivers expect, and it is available whether or not they kept a single fuel receipt.

The second is that the relief is not free money. It exists because running a car for that mileage really does cost thousands of pounds a year. The tax you save is compensation for money you have already spent.

What moves the number

• Crossing 10,000 miles. Everything after it is worth 25p rather than 55p, so the second half of the year is taxed harder than the first.
• A PAYE job alongside. It usually uses the personal allowance, so every pound of delivery profit becomes taxable and the bill roughly doubles on the same driving.
• Not logging miles. A driver who claims nothing on the same figures pays tax on the full £28,000 and hands over roughly £4,700 instead. That is the whole argument for keeping a mileage log.

What to put aside

On these figures, around 8% of everything the platforms pay you would have covered it, with a margin. A common rule of thumb is 20% to 25% of earnings, which is comfortably too much for a driver claiming full mileage relief and about right for one who is not.

The better approach is not a rule of thumb at all. JoltMile estimates the bill from your own figures as the year runs, updating every time you log a shift, so the amount to set aside is a number rather than a guess.