City Gig Tax Guide
Detroit Gig Worker Taxes
Detroit is one of the Michigan cities that levies its own income tax, and it reaches gig earnings. On top of Michigan's flat state income tax and the federal 15.3% self-employment tax, gig workers who live in or work in Detroit owe a city income tax too. Here's who owes it and how it's paid.
← Part of the complete Gig Worker Taxes guideHow gig taxes work for Detroit workers
You're an independent contractor — nothing is withheld
Gig platforms pay you as a 1099 contractor, not an employee, so no income or payroll tax comes out of your payouts. You're responsible for setting aside and paying your own taxes.
Federal self-employment tax is 15.3%
That's 12.4% Social Security + 2.9% Medicare on your net earnings — the employer-plus-employee share that a regular job would split with you. It applies in every state, on top of federal income tax.
Federal income tax applies to your net profit
After deductions, your net gig profit is added to your other income and taxed at your federal rate. You can deduct half of your self-employment tax when figuring federal income tax.
Report all income — even without a 1099
You must report every dollar you earn whether or not a platform sends a 1099-NEC or 1099-K. Reporting thresholds for the forms change year to year; your obligation to report does not.
Does Detroit have a city income tax for gig workers?
Yes. Detroit levies a city income tax that applies to gig earnings. If you live in Detroit, it applies to all of your net self-employment profit; if you live elsewhere but do gig work in the city, it applies to the income you earn from work performed in Detroit. Residents and nonresidents are taxed at different rates.
This city tax is on top of Michigan's flat state income tax and the federal 15.3% self-employment tax. The Detroit city income tax is administered through the Michigan Department of Treasury, and self-employed workers file a Detroit return reporting their net profit.
Rates and rules change, and apportioning income for work done partly inside and partly outside the city can be involved, so confirm the current rates and filing requirements with the Michigan Department of Treasury or a tax professional.
This Detroit city income tax is a local tax on top of federal and Michigan state tax — the 15.3% federal self-employment tax is the same everywhere, and your state tax is a separate layer.
What Detroit gig workers can deduct
Business mileage
Every mile driven while online or on a job, deducted at the IRS standard mileage rate. Usually the single largest deduction — keep a contemporaneous log.
Phone & data
The business-use percentage of your phone and data plan — you cannot accept jobs without it.
Supplies & equipment
Insulated bags, phone mounts, chargers, and other gear bought specifically for the work.
Tolls & parking
Tolls and parking paid while working are deductible (ordinary commuting tolls are not).
The same deductions that lower your federal and state tax also lower the net profit your local tax is figured on. Keep a contemporaneous mileage log and save receipts either way.
Quarterly estimated taxes
Because no tax is withheld from your payouts, the IRS expects you to pay as you go through quarterly estimated payments rather than one lump sum in April. If you expect to owe $1,000 or more in federal tax for the year, paying quarterly avoids an underpayment penalty.
Federal estimated payments are generally due around April 15, June 15, September 15, and January 15 of the following year. Michigan expects its own state estimates on a comparable schedule, and Detroit's local tax may have its own filing and payment requirements — see the city and state resources below for the exact forms and due dates.
Frequently asked questions
Do Detroit gig workers pay a city income tax?
Yes. Detroit residents owe the city income tax on all of their net self-employment profit, and nonresidents owe it on income earned from work performed in Detroit. Residents and nonresidents are taxed at different rates, on top of Michigan state and federal tax.
How do I pay Detroit city income tax as a gig worker?
You file a Detroit city income tax return reporting your net self-employment profit. The tax is administered through the Michigan Department of Treasury, and because nothing is withheld from gig payouts you may also need to make estimated payments. Confirm the current forms and schedule with Treasury.
What if I live outside Detroit but deliver in the city?
Detroit's nonresident city income tax applies to income you earn from work performed within the city, generally at a lower rate than the resident tax. Apportioning income between work done inside and outside Detroit can be involved — confirm the rules with the Michigan Department of Treasury.
Is the Detroit tax on top of Michigan state tax?
Yes. The Detroit city income tax applies in addition to Michigan's flat state income tax and the federal income and 15.3% self-employment taxes. Gig workers tied to Detroit can face all three layers.
How much should I set aside for taxes in Detroit?
Beyond the common 25–30% for federal income tax and the 15.3% self-employment tax, add Michigan's flat state income tax and the Detroit city income tax, so many set aside a bit more. Use the Tax Set-Aside calculator and confirm current city rates with the Michigan Department of Treasury.
Authoritative resources
Federal (IRS)
- IRS: Self-Employed Individuals Tax Center ↗
- IRS: Self-Employment Tax (Social Security and Medicare) ↗
- IRS: Estimated Taxes ↗
- IRS: Standard Mileage Rates ↗
Detroit & Michigan tax agencies
Free calculators
Stop guessing what you owe
UnifyOne tracks your gig earnings, mileage, and tax set-aside automatically — so quarterly taxes in Detroit are never a surprise.
This guide is educational information, not tax advice. Federal, state, and local tax rules, rates, thresholds, and the IRS standard mileage rate change yearly — confirm current figures with the IRS, the Michigan tax agency, the Detroit revenue office, or a qualified tax professional for your situation.