If you want to start up a side gig to help you pay your bills or pay down your student loans faster, you may have considered driving for GrubHub. GrubHub is a popular food delivery app that enables drivers to become their own boss as they pick up and deliver food to customers.
On average, GrubHub drivers make $13 per hour before expenses. Of course, that’s not guaranteed since GrubHub drivers are independent contractors, not salaried employees. How much you will actually make depends on how many deliveries you’re able to complete, where you’re working, and how well you’re able to minimize expenses.
Below, we’ll explore GrubHub driver’s average earnings, common GrubHub driver expenses, and information about paying taxes as an independent contractor.
Average GrubHub Driver Earnings
Full-Time GrubHub Driver Earnings
Driving for GrubHub isn’t a traditional full-time job, so you aren’t guaranteed a certain salary. However, employment sites still collect salary information from employees to estimate full-time wages. Indeed estimates a $50,542 average annual salary for GrubHub drivers. This is based on 6,540 salaries reported.
Given the hourly earnings we saw reported online, this estimate seems very high. To earn that much, you’d need to work in a large city or work more than 40 hours per week.
GrubHub Driver Hourly Earnings
Different sites show varied results for GrubHub hourly earnings, but most of what we saw falls into the $9 to $20 range. Glassdoor estimates—with very high confidence—that part-time GrubHub drivers earn an average of $13 per hour. This is based on 91 reported salaries.
GrubHub Driver Tips
GrubHub drivers keep 100% of tips. In the app, GrubHub encourages customers to tip 20%, but tips of that amount (or any amount) aren’t required to use the service. In 2017, one of GrubHub’s cofounders suggested that customers should tip 20% or $5, whichever is higher.
How much GrubHub drivers actually receive in tips varies. We found anecdotal evidence to support that tips make a significant portion of driver wages.
Ways GrubHub Drivers Make Money
Now, let’s take a look at how GrubHub Drivers make money.
Delivery Pay
Drivers earn money based on the mileage and time it should take to pick up the order and then deliver it to the customer’s house. The amount is specified in the app, so you know how much you’ll make before accepting the offer. If an order takes longer than anticipated, you don’t receive extra pay for the time.
Base delivery pay starts at $4, but some markets offer a higher base pay.
Tips
GrubHub drivers keep 100% of their tips. The app defaults to a suggested 20% tip, but tipping varies. Customers can tip in the app or with cash after the food is delivered.
The GH Contribution
GrubHub offers a guaranteed minimum wage to drivers who deliver during a block in select markets. This is called the GH Contribution. It’s available to drivers who deliver during a block, make less than a specified amount per hour that day, and have a high enough order acceptance rate.
For example, if you schedule yourself for a three-hour block, and the app shows a $12 per hour minimum, you’re guaranteed to earn at least $36. If your delivery fees and tips do not equal $36 after the three hours, GrubHub will pay you the difference.
GrubHub only offers the GH Contribution in certain markets.
How Much Does GrubHub Take From Your Pay?
GrubHub doesn’t take a fixed percentage or a fixed amount of money from your pay. Instead, GrubHub charges customers a delivery fee based on where they’re ordering from, the size of their order, and the time of day. Then, GrubHub calculates delivery pay for the driver based on the mileage and time for that market.
As the driver, you don’t see what the customer pays or what GrubHub makes off the delivery. You only see how much you will earn for completing the delivery. Plus, you get to keep 100% of the tips you earn.
What Affects How Much You Can Earn by Driving for GrubHub?
Unless you live in a market with guaranteed wages, your GrubHub earnings depend entirely on:
How Many Deliveries You Complete Per Hour
It should come as no surprise that the more deliveries you can complete within an hour, the more you’ll make per hour. Some GrubHub drivers even take on multiple deliveries at a time to improve their speed and increase their hourly earnings. Taking on multiple orders at once can be risky; it might increase wait times, which can affect tips.
Current GrubHub drivers also suggest paying close attention to the mileage when you accept a job. Unlike other delivery apps, GrubHub shows drivers the restaurant address and customer address when offering you a job. Taking jobs that might pay slightly less but require far less driving can help you take on more jobs within the hour, and thus, earn more tips.
When You’re Driving
GrubHub drivers who schedule blocks—periods of time when they will deliver food in a specific area—around lunchtime and dinner time have an easier time earning a higher hourly wage. You’re more likely to receive back-to-back orders as more people order food during mealtimes.
What Mode of Transportation You Use
Depending on the market, you can drive your car or ride your bicycle to deliver with GrubHub. Those who bike have fewer expenses, so they often make a higher profit. Of course, riding a bicycle can limit how much you’re able to deliver in one trip.
Your Market
In some states and cities, GrubHub drivers earn more than their counterparts in other locations.
For example, in California (as a result of Proposition 22), GrubHub must pay drivers a minimum wage based on 120% of minimum wage plus 30 cents per active mile driven in addition to their tips. The minimum wage is based on the state minimum wage or the city minimum wage if one is in effect. Drivers who work a certain number of hours per week also earn an allowance for health insurance.
Drivers working in large cities—where the cost of living is also higher—earn more per delivery and, thus, more per hour on average. For example, drivers working in New York City or Chicago earn more per delivery than drivers in smaller cities like Austin.
Your market also determines whether you’re eligible for guaranteed paid and the GH Contribution. Drivers who live in areas with guaranteed pay tend to make more than drivers in areas without guaranteed pay.
Tips
Drivers keep 100% of customer tips. Being timely and courteous can help you secure higher tips.
What are Some Common Expenses for GrubHub Drivers?
GrubHub drivers work as independent contractors, so driving for GrubHub is more like a business than a job. Drivers need to track and account for a variety of expenses, none of which are reimbursed by GrubHub.
Let’s take a look at a few common expenses GrubHub drivers may face:
Vehicle or Bike Maintenance
Driving or biking for GrubHub puts a lot of wear and tear on your bicycle or vehicle. Expect to spend more on maintenance expenses than you would if you were just driving or biking for personal use. Some expenses you might incur more often include new tires, oil changes, and refilling fluids.
Car Payment
If you lease a car or purchase a car to use for GrubHub, you will need to account for your car payment when calculating expenses. According to Experian, the average monthly payment for a new car loan is $568. The average monthly payment for a used car loan is $397.
Typically, you can claim all or part of the car payment as a business expense, depending on how you claim expenses and how often you use the car for business vs. personal use.
Auto Insurance
All GrubHub drivers (except for bicyclists) must have a personal auto insurance policy that meets the minimum requirements for their state. Most personal auto insurance policies do not cover you when you’re using your car for business—like driving for GrubHub, so you will need an insurance policy that covers business use. Unlike other delivery apps, GrubHub does not provide additional insurance coverage while you’re on the job.
If you use your vehicle for GrubHub deliveries and personal use, you will need a policy that covers both uses. The average rate for food delivery personal and business coverage is $3,562.00 per year according to autoinsurance.com. That’s $2,000+ more than their estimate for the average cost of just personal auto insurance.
Talk to your insurance company to find out how much it will cost you to add coverage when you’re driving for GrubHub.
Gas
GrubHub drivers are not reimbursed for gas expenses. You can, however, claim the standard mileage deduction on your taxes or deduct the actual cost of gas. Claiming the expense will reduce your taxable income and lower your tax burden; it doesn’t mean you’re getting reimbursed for gas money.
Insulated Delivery Bags
GrubHub requires its drivers to use insulated delivery bags to meet restaurant and diner expectations. GrubHub provides drivers with a set of branded bags—one general bag and one specifically designed for pizza boxes, but drivers can use whatever insulated delivery bags they like.
Some drivers decide to purchase additional GrubHub delivery bags, different delivery bags, and/or reusable drink carriers to make picking up orders more efficient. The price for insulated bags varies, but the standard GrubHub set costs $25.50 and the 6 cup carrier goes for $19.99.
Medical Insurance
Unless you live in California, GrubHub doesn’t subsidize any of your health insurance costs. You will need to pay for health insurance if you want it and do not already have it through another job.
GrubHub partners with Stride Health to offer affordable plans for all GrubHub drivers. Stride offers affordable health insurance, dental insurance, vision insurance, and life insurance plans. However, GrubHub doesn’t help you cover the cost of your insurance like an employer would.
According to Stride Health, the average Stride Health member, which includes GrubHub drivers, pays $150 per month for health insurance. Dental insurance is available for less than $30 per month, vision insurance for less than $10 per month, and $100,000 in life insurance starting at $6 per month.
What Taxes Do GrubHub Drivers Need to Pay?
GrubHub drivers are independent contractors, not employees, so most GrubHub drivers need to pay quarterly estimated taxes and self-employment taxes. For specific tax advice about becoming a GrubHub driver, consult a tax professional in your area.
Quarterly Estimated Tax Payments
Independent contractors who earn above a certain amount of money per year must make quarterly estimated tax payments for federal, state, and local taxes. These payments cover what you expect to owe in income taxes for the year, spread across four quarterly payments.
Thankfully, you don’t have to pay taxes on everything you withdraw from the GrubHub app. Drivers can claim business expenses to reduce their overall taxable income. Drivers who drive motor vehicles can take the standard mileage deduction, which in 2020, is 57.5 cents, or can claim actual expenses incurred for the use of their vehicle or their bicycle. GrubHub drivers can also claim other relevant business expenses like the purchase of delivery bags.
Self-Employment Taxes
GrubHub drivers must also pay self-employment taxes, which consist of your Social Security and Medicare taxes. When you’re an employee, your employer contributes 7.65% toward your taxes and withholds the other 7.65% from your pay. When you’re self-employed, like you are with GrubHub, you must pay the full 15.3%. To ease the burden a little, you’re allowed to deduct the employer portion (7.65%) as a business expense.
Is Becoming a GrubHub Driver Worth It?
Many people drive for GrubHub because they want a side gig to earn additional cash, or they want a flexible full-time job. Before expenses, GrubHub drivers tend to make more than the state’s minimum wage, but after expenses, it depends.
Given that the pay and benefits vary significantly depending on where you plan to work, do some location-specific research to help you decide if driving for GrubHub is worth it:
- Research average GrubHub driver earnings in your area; Sites like Reddit or rideshare forums can help
- Estimate your per-mile expenses based on your chosen mode of transportation
- Talk to a tax professional about GrubHub driver tax deductions and self-employment taxes
- Research the cost of health insurance and other benefits you want
- Compare your estimated earnings to what you could make from another job or side hustle
