Uber & Other Rideshare Driver Tax Guide: Deductions, GST, Tax Returns Tips

Do you drive for Uber or any other ridesharing company? Are you thinking to drive for uber? Well, driving for uber is a great way to earn extra income on the top of what you are already doing.  But, do you know what are the tax implications for the uber driver? You can’t keep all the money you receive from uber. It looks good income when you get your weekly payment from Uber. However, you are required to pay GST and income tax to the ATO. Same conditions apply for other rideshare driver.

You just need to keep in mind that when you work for uber you are not an employee, you are a contractor and you are required to pay taxes. It is like you are operating your own business.

According to Uber, “All Uber partners are independent contractors, so we do not withhold any taxes and partners are entirely responsible for their own tax obligations.”

Do Uber drivers pay GST?

From August ATO has confirmed that all uber drivers need to register for GST. So, they are liable to pay GST for the portion of fares and need to lodge Business Activity Statement (BAS) quarterly.

But good NEWS:

If you are only doing Uber Eats you do not need to register for GST and pay GST as you are not classified as a  taxi driver but as a delivery driver provided your turnover is less the $75,000. Other ATO conditions apply.

But if you are an Uber taxi driver as well as Uber eats delivery driver then you need to be registered for GST and pay GST on the total income.

Do uber drivers need to pay tax on Tips and driver appreciation reward payments?

 Any tips earned and reward payments received from uber is regarded as assessable income. Check what ATO says about Tips and appreciation reward from uber. 

What are the possible tax deductions for uber drivers?

 As an uber driver there are wide ranges of claims which you may be able to make on your tax return. Some of the expenses which are related to the work and which are tax deductible when you drive uber are listed below:

  1. Fuel cost and cost
  2. Parking charges (related to work)
  3. Cost of insurances
  4. Car cleaning cost
  5. Cost for equipements like sear covers, mobile phone holder
  6. Safety equipment
  7. Accountant’s fees
  8. Vehicle licensing and registration
  9. Uber related Bills of mobile phone
  10. Car Registration cost
  11. Insurance
  12. Car maintenance
  13. Other costs: police check done for uber driving application, medical tests done for uber application etc.
  14. Tolls
  15. Car Depreciation
  16. Interest on car loan
  17. Car rental fee                               

What you cannot claim as deduction:

  1. Fines for over speed
  2. Food and drink bought during shift
  3. Clothing (except safety clothing)
  4. Normal Driver License fee
  5. Cost to maintain driver personal hygiene

In order to claim the above mentioned expensed at the time of tax return uber driver should keep a record. For claiming such expenses there are two ways, cents per kilometer and logbook method. Anyone among this can be chosen by the uber driver in-order to keep record of their expenses.

Logbook method:

If an uber driver has kept the proper record book, then only he/she can claim the percentage of automobile operating expenses like, fuel cost, cost of washing and cleaning car, repair and maintenance cost etc. In order to declare expenses driver must keep the fuel slip and voucher of car wash and other voucher with them because it is the best form of providing proof to ATO.

Cents per kilometre:

This is the second method of keeping the record. But if you have not put up the record on logbook then you will be limited for using this method. By using this method you can claim 68 cents per kilometre up to5, 000 km because this provides maximum tax withdrawal of 3, 400

If you starts driving a uber then do not try to hide your uber income, because all of your activity like your name number plate are clearly shown on the uber application. If you do so then ATO can easily find you and they even can see your bank account. If they found you hiding income form uber then they will charge you huge amount of tax and fines as well as interest charge. To stay far away from fines you have to be honest with ATO. 

Looking to do Tax Returns & BAS for you ridesharing business like Uber, DiDi, Ola, Taxify, GoCatch etc? Contact us Today for friendly and professional service.

Read this if you are first time lodger: Tax Returns Guide for First Time Lodger – Tax Returns 2021