We will explain in detail how Uber drivers need to prepare for their tax. This information may be applied to other rideshare services such as Didi and Ola in a broad sense. The information is for general purpose and you must seek a professional advice from a qualified accountant.
To operate as an Uber driver, you must register for ABN as a sole trader and report your GST every quarter using a business activity statement (BAS). By law, a business with annual turnover less than $75,000 does not require a GST registration. However, a business that provides a rideshare services (i.e. Uber, Didi, and Ola, etc.) must registered for GST regardless of its annual turnover and report this on quarterly basis.
How to report income as rideshare service provider?
Firstly, the gross receipts from providing rideshare services is the gross revenue for the business. Business related expenditures are then deducted from the gross revenue to calculate a net profit from the business, which is your assessable income. Every quarter you must report your GST by calculating the difference between GST payable amount from gross receipts and GST receivable amount from business related expenditures. If your GST payable exceeds GST receivable, the difference is the amount that needs to be remitted to ATO for that quarter. Otherwise, if GST receivable is greater than GST payable, the difference will be refunded for that quarter. Your annual tax return will be lodged after 30 June by incorporating your net business income and other income. You can consult with your accountant for more detail.
(*Note, food delivery is considered a different industry as compared to rideshare service industry, therefore does not require a GST registration unless rideshare service is provided in conjunction with food delivery services)
What exactly are business related expenditures?
There is a general list to help you understand what can be claimed as business related expenditures for this industry.
You can claim motor vehicle expenses incurred in carrying on a Uber business or other rideshare services. There are two methods to claim these expenses which are “Cents per KM” and “Logbook method”. You can only claim up to 5,000 km using the Cents per KM method.
There are expenses that are not allowed for tax deduction and must be discussed with your accountant before claiming. Some of non-deductible expense are:
What needs to be prepared for my tax return?
We have looked in detail the tax returns and GST reporting requirements for Uber/other rideshare drivers. To ensure you do the right thing, we recommend consulting with our experienced team for more specific advice.
*Note that above information is for general use only and is not intended to substitute for a professional tax advice. You must always
seek a professional advice from an accountant to avoid unlawful acts.