What Taxes Do Gig Workers Pay?

Gig workers — drivers, delivery people, freelancers, online sellers — are treated as self-employed by the IRS. That means you pay both self-employment tax (15.3%) and regular income tax on your net earnings. You won't have taxes withheld from your pay, so you need to make quarterly estimated payments to avoid penalties. The good news: you can deduct business expenses like mileage, phone, and supplies to reduce your taxable income. Even if gig work is your side job, all income is taxable.