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Driver Pay & Mileage Reimbursement Calculator

Three common ways to pay a delivery driver who uses their own car, side by side: what the driver really keeps per hour once the car is paid for, and what each delivery costs you.

By KwickSpot Editorial Team · Updated September 21, 2026

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Wage, tips, trip length and the flat amount are an example scenario, not industry averages. The IRS mileage rate, employer payroll-tax rate and federal wage figures are sourced below. Replace everything with your own numbers.

The shift
$/ hr

Cash wage before tips and reimbursement.

%

7.65% = employer Social Security 6.2% + Medicare 1.45%. Add your unemployment and workers’ comp rates. Source.

/ hr

Include waiting time between runs.

miles

Store → customer → store.

$

From your own POS tip report.

$/ mile

Gas, wear, insurance, depreciation. The IRS rate is built from a study of those costs, so it is the usual stand-in.

The three pay models
$/ mile

Wage + this rate × miles actually driven. Source.

$/ delivery

Wage + the same amount for every delivery, near or far.

Uses the same wage and tips. The driver carries the whole vehicle cost. Shown because it is common, not because it is recommended — read the caveats below.

Minimum-wage check
$/ hr

Pre-filled with the federal $7.25. Most states and many cities are higher — enter yours. Source.

Results

Per hour for the driver, per delivery for the restaurant.

APer-mile
—
BFlat per delivery
—
CTips only
—

What the driver keeps per hour, after vehicle cost

Paid by you (wage + reimbursement − vehicle cost)Tips

All the numbers

 A · Per-mileB · FlatC · Tips only

How this calculator works

All three models share the same shift: the same wage, tips, deliveries per hour and trip length. The only thing that changes is how the driver is paid back for using their own car. Everything is worked out per paid hour, then divided by deliveries per hour to get a per-delivery figure.

reimbursement per delivery = A: rate per mile × round-trip miles · B: flat amount · C: $0

reimbursement per hour = reimbursement per delivery × deliveries per hour

vehicle cost per hour = real cost per mile × round-trip miles × deliveries per hour

driver gross per hour = wage + tips per delivery × deliveries per hour + reimbursement per hour

driver keeps per hour = driver gross per hour − vehicle cost per hour

paid by you, net of vehicle cost = wage + reimbursement per hour − vehicle cost per hour

restaurant cost per hour = wage × (1 + payroll tax %) + reimbursement per hour

restaurant cost per delivery = restaurant cost per hour ÷ deliveries per hour

flat amount as a per-mile rate = flat amount ÷ round-trip miles

The chart splits what the driver keeps into the part that comes from you and the part that comes from customers’ tips. The dashed line is the minimum wage you entered. The split matters because the minimum-wage question is about what the employer’s pay looks like after the driver has covered work expenses, not about how generous customers were that night.

Why the flat amount is risky on long runs

A flat $2.50 covers a 3-mile round trip at about 83¢ a mile and a 10-mile round trip at 25¢ a mile. If your delivery area has grown, a flat amount that was fair two years ago may now leave drivers paying to work. Model A avoids that by following the miles; the trade-off is that someone has to record them. GPS trip logs from a driver app do that without paper.

The tip-credit and vehicle-cost caveats

Under the federal Fair Labor Standards Act an employer may pay a tipped employee a cash wage of at least $2.13 an hour and count up to $5.12 an hour of tips toward the $7.25 federal minimum, but only if tips actually make up the difference in every workweek and the employee was told about the tip credit in advance. The U.S. Department of Labor also says that when state law differs, the employer must follow whichever standard protects the employee more, and several states do not allow a tip credit at all. Source: U.S. DOL, Fact Sheet #15.

Separately, federal rules require wages to be paid “free and clear”. The regulation’s own example is an employee who must provide tools for the job: there is a violation in any workweek when that cost cuts into the required minimum or overtime wage. A driver’s own car is commonly analysed the same way, which is why the tool flags any model where your pay minus the driver’s vehicle cost falls below the minimum wage you entered. Source: 29 CFR § 531.35.

The Department of Labor has addressed delivery drivers directly. In Opinion Letter FLSA2020-12 (August 31, 2020) the Wage and Hour Division said an employer may reimburse a reasonable approximation of drivers’ vehicle expenses; the IRS rate and actual cost are acceptable methods, but not the only ones. That is why the IRS rate is a default here and not a rule. Opinion letters can be withdrawn or superseded, so confirm the current position before relying on it. Source: WHD Opinion Letter FLSA2020-12 (PDF).

Delivery driver in a cap and blue shirt carrying a pizza box along a residential street on a sunny day
Photo: Mizuno K / Pexels

Limitations

  • It models an employee using a personal vehicle. Independent-contractor arrangements, company cars, bikes and scooters work differently.
  • Averages hide bad nights. A slow shift has fewer deliveries and fewer tips but the same hourly wage; test a low deliveries-per-hour figure as well.
  • The driver’s real cost per mile depends on the car. An older paid-off compact costs less than the IRS rate; a newer SUV can cost more.
  • Whether a reimbursement is tax-free to the driver depends on how it is documented (for example, mileage records). The payroll-tax line here is applied to wages only. Ask your accountant.
  • Overtime, tip pooling, service charges, and state or city pay rules are not modelled.

This is a planning estimate. It is not legal, tax or payroll advice; wage-and-hour rules vary by state and city, so confirm your pay plan with a qualified professional.

Sources for the pre-filled numbers

  • IRS standard mileage rate, business use: 76 cents per mile for July 1 – December 31, 2026; 72.5 cents for January 1 – June 30, 2026. The IRS says the business rate is “based on an annual study of the fixed and variable costs of operating an automobile”. Source: IRS, Standard mileage ratesAs of September 2026 (IRS page last updated July 28, 2026).
  • Employer payroll taxes: Social Security 6.2% and Medicare 1.45% for the employer, 7.65% combined. Source: IRS Topic no. 751As of September 2026 (IRS page last updated January 20, 2026).

Running your own drivers?

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