Couriers and drivers: working for a platform as a contractor

A contractor, not the platform's employee

When you take deliveries against payment from a platform you are in most cases self-employed: you choose shifts, use your own vehicle and bear the costs. The platform does not deduct tax from the payouts. That means everything that comes in is before tax and contributions, and you need to set money aside yourself. If the platform directs the work like an employer, the relationship can still be reviewed as employment; see contractor or employee.

First steps

1. Register on the employer register with RSK 5.02 no later than 8 days before you start.
2. Category and calculated remuneration. Choose the category that covers driving and delivery in Skatturinn's calculated remuneration rules and register a monthly salary that reflects your hours.
3. Pension fund. Choose a fund; the contribution is 4% + 11.5% of calculated remuneration.
4. VAT register once turnover heads above 2,000,000 ISK in 12 months. Delivery services and domestic transport of goods are taxable at 24%, unlike passenger transport, which is exempt.

Payouts and calculated remuneration

Platforms often pay weekly and send a statement with their service fee deducted. For Skatturinn the monthly total matters: it is your turnover. From it you pay yourself calculated remuneration of at least the category minimum and pay payroll costs and withholding. Example with 450,000 ISK of payouts per month and the same amount as calculated remuneration: employer pension 51,750 ISK, social security 31,861 ISK, employee pension 18,000 ISK, withholding 63,545 ISK after the personal tax credit. Use the payroll calculator for your figures.

VAT on platform statements

If you are VAT-registered, your delivery fees are taxable sales. Depending on the platform's settlement model, either it issues the invoice on your behalf (self-billing) or you invoice the platform; in both cases VAT must be shown. The platform's service fee is a purchase for you. If the platform is foreign, the fee may carry VAT on purchases that you calculate yourself. Get clear answers from the platform on how settlement is set up for VAT before you register.

Car, bike and phone

Costs incurred to earn the income are deductible in proportion to business use:

• Car: fuel, insurance, maintenance, vehicle taxes and depreciation, split by business-use share according to a mileage log. Filed with the vehicle operating statement (RSK 4.03). See vehicle costs.
• Bikes and e-scooters: purchase price and maintenance; more expensive equipment is depreciated over several years.
• Phone and data: business share with a justification.
• Protective clothing, bags, chargers: in full if used only for work.

Receipts and a mileage log from day one are what make the deduction hold. Also check with your insurer that your car policy covers commercial driving.

Your rights

Social security and pension contributions earn you unemployment benefit, parental leave, sickness benefit and pension, but the amounts are based on calculated remuneration. Low calculated remuneration saves tax today and costs rights tomorrow. See rights of the self-employed.

Monthly routine

• Collect platform statements and record turnover.
• Withholding and social security return by the 15th of the next month; pension contribution to the fund.
• VAT return every two months if VAT-registered.
• Receipts and mileage logged as they arise.

Fustle keeps turnover, expenses and payroll calculations together with the year's figures; the flexible Payroll plan costs 4% of payments received, capped at 13,900 ISK per month + VAT, and 0 ISK in a month with no payments.