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Tax Deductions For Uber Drivers
The first question every rideshare and food delivery driver wants to know: what tax deductions can I claim for Uber? This article explains the different options for claiming Uber tax deductions to boost your tax refund, claiming car expenses for Uber, how to keep a logbook, as well as a range of other potential tax deductions for rideshare and food delivery drivers in Australia.
Car Deductions for Uber
Let’s take a look at these two methods in detail.
A logbook is used as evidence to the ATO of the percentage that you use your car for business use vs private use. If you have kept a valid logbook, you can claim a percentage of your vehicle running expenses, including:
- servicing, repairs, tyres and other maintenance costs
- cleaning costs
- depreciation on the purchase price of your car (if you own your car)
- interest (if you have a loan on your car)
- rental/hire/lease fees (if you lease/rent your car)
If you wish to claim these expenses you MUST have a valid logbook. We’ll explain the requirements for a logbook in more detail below.
A quick note regarding depreciation. Depreciation is usually claimed over a number of years, but you may be eligible to claim the Instant Asset Write-Off for small business instead. Check out our article on Buying A Car For Uber for more detail on the current thresholds and eligibility requirements.
The records you’ll need to keep for your car expenses are:
- Fuel – fuel receipts are the best form of evidence, so we suggest keeping an envelope in your glovebox to collect these. If you don’t have receipts, the ATO will accept your bank statements as evidence.
- Other Running Costs – you’ll need receipts or bank records of your registration, insurance, servicing, repairs, tyres, maintenance, cleaning and other costs
- Car Washes – if you don’t get a receipt for your car washes, the ATO will accept a diary note or other handwritten note with the date and amount of your car wash. Keep a little notebook handy in your glovebox to write these down.
- Depreciation – you’ll need the tax invoice or purchase details of your car, so that depreciation can be calculated
- Interest – if you have a loan or finance, you’ll need to find out how much interest you paid (not loan repayments, just the interest) for the financial year. If you don’t have this, you will need to supply us with your original loan documents showing the amount borrowed, repayments, term of the loan and interest rate.
- Lease Payments – if you lease your car, the whole amount of your lease payments are deductible
- Logbook – to claim all of the above expenses, you must have a valid logbook. Otherwise your car expenses are irrelevant and you’ll be limited to the cents per kilometre method.
The ATO will accept bank records for your end of year tax return, but for your BAS’s you must have a tax invoice for all business expenses over $82.50 in order to claim the GST back.
Cents Per Km Method
If you haven’t kept a valid logbook you’ll be restricted to using the Cents per Kilometre Method instead.
You can claim 68 cents per kilometre up to a maximum of 5,000 km. This gives a maximum tax deduction of $3,400. You don’t have to have specific records of your kilometres. Instead you can make a ‘reasonable estimate’ based on your patterns of work, diary notes, records from Uber/the company you drive for, etc. Note that you can claim the kilometres in between trips as well as kilometres while you have a passenger or are making a delivery. You can also claim kilometres between home and your first trip, and from your last trip back home again.
If you’ve been driving more than just a small amount then $3,400 may be much less than your actual car expenses. This would give you a lower tax deduction and therefore a bigger tax bill. We recommend unless you are just an occasional driver you should keep a logbook so that you don’t miss out on claiming all of your expenses.
Keeping a Logbook for Uber
Here are the essentials of keeping a logbook:
- It must go for 12 weeks. It’s okay if the 12 weeks go past the 30th of June (e.g. you keep your logbook from May-July). But you must start before the 30th of June for it to count for the current year.
- You only need to make one logbook entry for each shift/session of Uber driving, you don’t need to record individual deliveries. You also don’t need to record private/non-business trips.
- You must record the date, and the odometer reading of your car at the start and end of each shift/session of driving.
- You should start your logbook when you leave home or switch on your delivery app, and stop when you arrive back home or switch off the app. Your kms to and from home, and your kms in between deliveries can all be included.
The Free DriveTax Uber Logbook Spreadsheet is the easiest way to track your kilometres, and it does all the adding up and calculates your percentage for you. Download your free copy here. If you prefer a physical paper logbook we recommend the Zions Pocket Logbook, which you can buy from Officeworks for under $7. Using an app is also fine, as long as you are still recording your odometer readings.
It’s important to note that the kilometre records that Uber sends you are not enough to meet the ATO’s requirements of a logbook, because they don’t show your car’s odometer readings. They also don’t include your kms in between trips, so you’ll be missing out on tax deductions!
Other Uber Tax Deductions
Other rideshare related expenses that will be tax deductible include:
- Uber Service Fees – these are the fees that are deducted from your Uber fares, essentially Uber’s commission
- Other Fees – application fees, medical tests, police check, driver accreditation, driver training etc
- Rider Amenities – water, mints, newspapers, tissues etc
- Tolls – you can claim tolls while on trips and tolls in between trips as well
- Parking – if you don’t get a receipt, and the amount is under $10, you may write a diary note instead, just as for car washes above.
- Cleaning Costs – for specific passenger incidents you can claim the whole amount, but general cleaning costs, such as car washes, must have your logbook percentage applied.
- Safety Equipment – hi-visibility clothing, sunglasses (though if you use them when not driving as well you must specify a percentage of Uber use),
- Equipment and Accessories – dashcam, seat covers, mobile phone holder
- Mobile Phone Bills – you can claim a percentage of your mobile phone bill
- Home Office Expenses – stationery, computer expenses, a percentage of your home internet bill
- Music Apps
- Bank Fees – but only if you have a separate bank account just for Uber
- Tax Agent’s or Accountant’s Fees
Costs that are not tax deductible include:
- Clothing – clothing is a personal expense. Only safety wear, such as hi-visibility clothing or steel cap boots is deductible.
- Personal Hygiene costs – deodorant, haircuts etc
- Meals – you cannot claim for food or coffee for yourself
- Fines – even if directly related to Uber
- Driver’s Licence – your normal drivers licence is considered a private expense
If you have expenses that you’re not sure are deductible, keep the receipts anyway, and let your accountant advise you at tax time whether they can be claimed.
If you’re a rideshare driver, keep in mind that there are some Uber and ridesharing expenses that are claimable on your tax return but not your BAS, or vice versa. Head to our Uber BAS Ultimate Guide to learn what expenses you can claim on your Uber BAS.
Claiming GST ON Your BAS
If you do rideshare driving, in addition to your end of year income tax return you must lodge a Business Activity Statement (BAS) to the ATO every quarter to pay GST on your Uber income.
You can claim GST credits to offset your GST bill, just like claiming tax deductions. However there are some differences in what expenses you can claim and what receipts you need to keep. To learn more, check out our Ultimate Guide to BAS’s for Uber Drivers.
Learn More About Claiming Tax Deductions For Uber
This article covers the bare essentials of claiming tax deductions as an Uber driver. Here are a few more articles you might find useful:
- How to get an ABN for Uber
- GST Registration for Uber Drivers
- Ultimate Guide to BAS for Uber Drivers
- Ultimate Guide to Tax for Uber Drivers
- DriveTax Blog full of tax tips and tax advice for Australian Uber drivers
- BAS and Tax Return lodgement services from tax agents and Uber Tax experts DriveTax
If you’d like a more in depth understanding of your Uber tax obligations, you may be interested in our Understanding Uber Taxes online course. Through a series of 30+ video lessons and tutorials, you’ll learn exactly how to calculate your Uber tax deductions, the easiest way to keep records, the FULL version of the DriveTax Bookkeeping Spreadsheet, how to lodge your own tax return BAS statements and much more. Visit our course information page to find out more.
Happy and safe driving!
Thoughts? Questions? Leave a comment below and I’ll respond shortly! – Jess
The information in this article is general in nature and does not take into account your personal circumstances. If you’d like to know how this article applies to you, please contact us to arrange a consultation, or talk to your accountant.
About the Author – Jess Murray CPA – Uber Accountant
Jess Murray is a CPA Accountant and registered tax agent. She’s been working in personal and small business tax for 13 years, and has been specialising in tax for Australian Uber Drivers for the last 5 years as the Director of DriveTax. She also teaches an online course called Understanding Uber Taxes.
Jess is on a mission to make taxes straightforward and manageable for Uber drivers across Australia.