Quick Answer
Business use percentage is the ratio of business miles to total miles driven. If you drove 20,000 miles total and 8,000 were for business, your business use percentage is 40%. This determines how much of your vehicle expenses (gas, insurance, repairs) you can deduct.
Best Answer
Alex Torres, Gig Economy Tax Educator
This answer is best for drivers who use their personal vehicle primarily for rideshare or delivery work
How to calculate business use percentage for your vehicle
Business use percentage is simply the portion of your total vehicle use that was for business purposes. It's calculated as: Business miles ÷ Total miles = Business use percentage.
For example, if you drove 25,000 miles in 2026 and 15,000 of those were for Uber, DoorDash, or other gig work, your business use percentage would be 60% (15,000 ÷ 25,000 = 0.60).
Example: Full-time rideshare driver calculation
Let's say you're a full-time Uber driver in Chicago:
This means you can deduct 80% of your vehicle expenses. If your total vehicle expenses were $12,000 for the year, you could deduct $9,600 ($12,000 × 80%).
What counts as business miles
According to [IRS Publication 463](https://www.irs.gov/pub/irs-pdf/p463.pdf), business miles include:
What doesn't count:
Key factors that affect your percentage
Two methods to claim vehicle deductions
What you should do
1. Track every mile using an app like MileIQ, Everlance, or our [expense-tracker](expense-tracker) tool
2. Calculate your percentage monthly to spot trends and ensure accuracy
3. Keep documentation of your business purpose for each trip
4. Review at year-end to make sure your percentage makes sense for your work pattern
Use our [deduction-finder](deduction-finder) tool to see which vehicle deduction method saves you more money based on your specific situation.
Key takeaway: Most full-time rideshare drivers have business use percentages between 70-85%, while part-time drivers typically see 30-50%. The higher your percentage, the more vehicle expenses you can deduct.
*Sources: [IRS Publication 463](https://www.irs.gov/pub/irs-pdf/p463.pdf), [IRS Revenue Procedure 2025-1](https://www.irs.gov/pub/irs-pdf/rp25-01.pdf)*
Key Takeaway: Most full-time rideshare drivers can claim 70-85% business use, while part-time drivers average 30-50%.
Business use percentages by driver type and typical annual deduction amounts
| Driver Type | Typical Business Use % | Annual Miles | Deductible Miles | Standard Mileage Deduction (70¢/mile) |
|---|---|---|---|---|
| Full-time rideshare | 70-85% | 35,000 | 24,500-29,750 | $17,150-$20,825 |
| Part-time rideshare | 30-50% | 20,000 | 6,000-10,000 | $4,200-$7,000 |
| Full-time freelancer | 40-60% | 15,000 | 6,000-9,000 | $4,200-$6,300 |
| Side hustle only | 20-40% | 18,000 | 3,600-7,200 | $2,520-$5,040 |
More Perspectives
Priya Sharma, Small Business Tax Analyst
This answer focuses on freelancers who use their vehicle for client meetings, supply runs, and business travel
Business use percentage for independent contractors
As a full-time freelancer, your business use percentage depends on how much you drive for client work versus personal use. Unlike rideshare drivers who rack up miles continuously, your business driving is typically more intentional and trip-specific.
Example: Freelance photographer calculation
A wedding photographer might drive:
Strategic considerations for freelancers
Unlike gig workers, freelancers can often structure their business to maximize their business use percentage:
Documentation is critical
Freelancers face more IRS scrutiny than rideshare drivers because your business miles aren't automatically tracked by an app. You need to document:
Most freelancers should aim for detailed records rather than trying to maximize their percentage through aggressive interpretations.
Key takeaway: Freelancers typically have business use percentages between 25-60%, depending on their client base and work structure.
Key Takeaway: Freelancers typically achieve 25-60% business use, with home-based contractors on the higher end.
Alex Torres, Gig Economy Tax Educator
This answer is for people who have a regular W-2 job plus freelance or gig income on the side
Business use percentage for side hustlers
When you have both W-2 employment and 1099 income, calculating business use percentage gets trickier because you need to separate your regular commute from your side business driving.
Example: Teacher who drives for Uber on weekends
Important: You cannot deduct commuting miles to your W-2 job, even if you drive for Uber afterward.
Common side hustle scenarios
The commuting trap
Many side hustlers make the mistake of including their regular job commute in business miles. According to IRS rules, driving from home to your regular workplace is personal, not business—even if you plan to do gig work afterward.
Correct approach: Only count miles that are purely for your side business.
Key takeaway: Side hustlers typically see lower business use percentages (20-40%) because regular job commuting miles don't qualify as business expenses.
Key Takeaway: Side hustlers average 20-40% business use since regular job commuting isn't deductible.
Sources
- IRS Publication 463 — Travel, Gift, and Car Expenses
- IRS Revenue Procedure 2025-1 — Standard Mileage Rates for 2026
Related Questions
Reviewed by Priya Sharma, Small Business Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.