FREE Uber Tax Info Pack
FREE 5-Day Email Course to learn the ATO’s Uber tax rules
FREE Uber Expense Spreadsheet so you never miss a deduction
FREE Uber Logbook Spreadsheet to claim your car expenses
FREE ABN & GST Registration (if you need it!)
FREE Uber Tax Info Pack
> FREE 5-Day ‘Uber Tax Essentials’ eCourse
> FREE Uber Bookkeeping Spreadsheet
> FREE Uber Logbook Spreadsheet
> FREE ABN & GST Registration
Tax Deductions For Uber Drivers
Updated 27th of June 2024
The first question every rideshare and food delivery driver wants to know: what tax deductions can I claim for Uber?
Learn how Uber tax deductions work, what you can claim on your Uber tax return, how to keep a logbook, how the instant asset write-off works, what receipts you need and more. This is everything that rideshare and food delivery drivers in Australia need to know about maximising their tax deductions for Uber.
Car Deductions for Uber
There are two different methods available for claiming motor vehicle expenses, the Logbook Method and the Cents Per Kilometre method. You can choose whichever one gives you the biggest tax deduction.
Let’s take a look at these two methods in detail.
(Do you own an Electric Vehicle? You may also like to check out our article about How To Claim An Electric Vehicle For Uber)
The Logbook Method
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:
- fuel or electricity (see our article on claiming deductions for an EV)
- registration
- insurance
- servicing, repairs, tyres and other maintenance costs
- cleaning costs
- accessories (e.g. car seat covers, phone holders, tinted windows)
- depreciation on the purchase price of your car (if you own your car)
- rental/hire/lease fees (if you lease/rent your car)
- interest (if you have a loan on your car)
If you wish to claim these expenses you MUST have a valid logbook, even if you use your car 100% for Uber. We’ll explain the requirements for a logbook in more detail below.
A quick note regarding depreciation. When you purchase a new asset such as a car, bike or scooter, the tax deduction for the cost of the asset is usually claimed over a number of years. This gradual claim is called depreciation.
However, over recent years, the ATO have offered larger upfront deductions, subject to certain limitations:
- 2021, 2022 & 2023 – Temporary Full Expensing – all business assets could be claimed up front, or ‘written-off’ in the year of purchase
- 2024 & 2025 – Instant Asset Write Off – assets costing under a set threshold can be written off. The threshold for the 2023-2024 financial year is $20,000. For 2024-2025 the threshold is proposed to be $20,000 as well, but this hasn’t been passed into law by the government yet.
If you have purchased a car this year or are thinking about buying one soon, check out our article on Buying A Car For Uber for more detail on how these white-off and depreciation rules work.
Keeping Receipts & Records
If you plan to claim your car expenses using the logbook method, you’ll need to keep the following records:
- 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 Car 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. More on keeping a logbook below.
If you are registered for GST, the record-keeping rules are a little different. For your BAS’s, for expenses over $82.50 you must have an official tax invoice in order to claim GST. For expenses under $82.50 just a receipt or bank record is file. This does make things tricky for fuel, as some fill-ups will be over $82.50 while others may be under, so my advice is to just create the habit of keeping every fuel receipt. That way, you can be sure you’ll never miss out on a GST claim.
The Cents Per Km Method
If you haven’t kept a valid 12-week logbook, then your only option for claiming car expenses is the Cents per Kilometre Method. The ATO gives us a set rate that we can claim per km, and we can claim a maximum of 5,000km. The current rates are as follows:
- 2022-2023: rate of 78 cents per kilometre, which gives a maximum deduction of 78c x 5,000km = $3,900
- 2023-2024: rate of 85 cents per kilometre, which gives a maximum deduction of 85c x 5,000km = $4,250
- 2024-2025: rate of 88 cents per kilometre, which gives a maximum deduction of 88c x 5,000km = $4,400
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 $4,250 may be much less than your actual car expenses. So if you don’t keep a logbook you would end up with a lower tax deduction and therefore a bigger tax bill. So unless you are just an occasional driver, we recommend that 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 your logbook to count for the current year’s tax return.
- You only need to make one logbook entry for each shift/session of Uber driving, you don’t need to record individual trips. So for example a 5-hour shift with 20 passengers/deliveries would still be just one logbook entry.
- You 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 around $8. 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!
For more detail on logbooks, including exactly what trips you can and can’t claim and tips to maximise your logbook percentage, visit our blog post on How To Keep An Uber Logbook.
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, sunscreen (though if you use them when not driving as well you must specify a percentage of Uber use)
- Sanitation & Hygiene – masks, hand sanitiser, sanitation wipes (but not personal hygiene like deodorant)
- 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 – but only for the percentage of time you have passengers in the car, not when you’re in the car alone, so I only recommend claiming a maximum of 50%
- Bank Fees – but only if you have a separate bank account just for Uber
- Tax Agent’s or Accountant’s Fees
- Super Contributions – for more detail please see our article on claiming a deduction for super contributions.
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 – deodorant, haircuts etc
- Personal Comfort or Health – driving long hours is understandably hard on the body, but backrests, cushions, physiotherapists, massages and all other expenses relating to your bodily wellness or comfort are considered personal and are not deductible
- Prescription Glasses that are not Sunglasses – only sunglasses are deductible
- Meals – you cannot claim for food or coffee for yourself
- Fines – even if directly related to Uber
- Driver’s Licence – your normal driver’s licence is considered a private expense
If you have an expense that you’re not sure is deductible, keep the receipt anyway, and let your accountant advise you at tax time whether they can be claimed.
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 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
- How To Keep A Logbook For Uber
- Ultimate Guide to BAS for Uber Drivers
- Ultimate Guide to Tax for Uber Drivers
- DriveTax BAS lodgement services
- DriveTax Tax Return lodgement services
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
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 15 years, and has been specialising in tax for Australian Uber Drivers for the last 7 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.
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.
I purchased a phone in Dec 2023 and started Uber in April 2024. Can I claim its cost in GST BAS and an income tax return? I have prepared a logbook, can I claim based on that percentage? If not, how can I prepare the estimation as I use the phone data on Uber?
Hi Sabina, you can only claim GST if you were registered for GST on the date of purchase, and you can only be registered for GST if you were actively running a business already at that time (i.e. already started the Uber application and preparation process). You can’t use your logbook for your phone percentage, because the kms you drive are completely separate from how you use your phone. The best way to work out your phone use percentage is to base it on usage time, as opposed to calls or megabytes of data. If you think about the number of hours per week that you spend actively using your phone (calls, messaging, Uber, social media, internet scrolling etc), what percentage of that time would be for Uber? You don’t need to be too scientific, just a reasonable estimate is fine. – Jess
HI Jess
Just found your site great info
I lease a car for UBER which I do fulltime can the Lease payments be a deduction ?
If I use the car say 95% for uber do I claim 95% of Lease payments ?
If my accountant hasn’t done this in previous returns can I do an adjustment ?
Hi Tony, if the car is leased through salary packaging then it cannot be claimed as a tax deduction as well. You would have already received your tax benefit by way of the salary packaging, so to also claim a tax deduction would be double-dipping. On the other hand, if it is not salary packaged, then yes you can claim a deduction as long as you have a valid 12-week logbook. Tax returns can be amended up to two years from the date on your Notice of Assessment. – Jess
Hi Jess
Thinking of paying my kids to clean car daily. Will this be tax deductible?
Hi Moss, of course within your family in private you can create whatever arrangement you want. But if you want to claim a tax deduction for the cost, then your children would have to be of legal working age, they must each have an ABN, they must charge market rates for their services, provide you with a valid invoice, and declare the income in the business schedule of their tax returns. I would suggest the cost of complying with the tax obligations would outweigh the tax benefits of being able to claim the expense. – Jess
Hi Jess
Hope you are well.
I’ve been driving my partner’s car for Uber since July 2023. I have kept a log book for mileage and all the uber related expenses.
I am contemplating buying a new car before this financial year.
Say if I bought a new car in late March and started driving it for Uber.
Is it possible for me to claim the tax deduction for my partner’s car and also the new car (i.e GST +. Depreciation) in this financial year?
Thanks!
Hello, yes it’s fine to claim two different cars during one financial year, but since you only have one logbook, you can only claim one car at a time. So on the date you buy your new car, from that date forward you cannot claim any more expenses for the previous car. – Jess
thanks for your reply
Understood. The situation is I may drive the new and the old car for Uber (depending my wife schedule ) . In this case, can I keep track of two log books and two expenses sheet to claim both in the end of financial year?
Yes, in this case you must start two brand new 12 week logbooks. They must start and finish on the same date, and then you must keep separate records of the expenses for each car, as you mentioned. Alternatively, if you will only use one of the cars occasionally, it can be easier to just claim the cents per km method for that car and then you won’t have to keep records of the expenses. The choice is yours. – Jess
I bought an EV car in tax year 2023. I received a QLD government subsidy of $3000. This financial year the subsidy was increased to $6000 and I received a further subsidy of $3000. I purchased the car for some purpose of Uber driving and have kept a log book. Is the subsidy declared as income on my annual return. I presume it doesn’t feature in a BAS?
Hi Tony, technically this would be an adjustment to the cost base of the car, so it depends on what type of depreciation you claimed in your 2023 tax return. But in any case, you’re correct for now that there is no impact on yoru BAS, and it will be accounted for in your end of year tax return. If you’re lodging through a tax agent then they’ll take care fo the adjustment for you, or if you lodge yourself through MyGov then you’ll need see how the MyGov form requires you to enter it. – Jess
Hi there,
I purchase a new EV on a lease in the 22/23 financial year but terminated that lease early so that I could use the vehicle for rideshare purposes.
I now pay that vehicle back as a loan.
What documents would I need to gather to give DriveTax for the maximum benefit?
Hi Jan, that’s no problem, we can work out the tax deductions for you as part of our Express Tax service. Once you have submitted your Express Tax form you would then need You would need to send through your vehicle purchase invoice, loan documents, and anything else that has figures needed for our calculations. – Jess
Hi Jess
Thank you for putting this together. This is very informative.
I understand we can claim car depreciation on a new car. However, how does it work when it comes to car that we owned prior to starting doing uber?. For example, we have owned our car since 2017 and only had done 30k kms in all these time. I started doing Uber in January this year, am I able to claim depreciation or temporary write off for this car based on market value at the time I started doing Uber? If so, how do I calculate the life?
Thank you
Hi Juan, you can claim the write-off/depreciation, but it’s not based on market value. Instead, you must calculate how much the car has depreciated between the date you bought it and the date you started doing Uber, using the 25% diminishing value method. If you would like help with this you could consider our Understanding Uber Taxes course, or you can find calculators online. – Jess
If I’m buying a car under my partner name as she’s more eligible to get a loan then I am .how am I to claim.im going to use this new car for Uber usage
Hi Jay, if you’re a delivery driver then this will be fine. For tax deduction purposes the ATO is fine for expenses to be in a spouses name, they understand that spouses often share assets and finances. You must have a logbook to prove your usage, and then you can claim the deductions. However if you’re a rideshare driver it will be a problem for claiming the GST on your car, because for expenses over $1,000 the tax invoice must show your name. The loan is no problem, it’s just the tax invoice for the purchase of the car itself (and for any other expenses over $1,000). – Jess
Hi Jess,
I am planning to borrow my girl friend car (which solely under her name) for Uber driving. She’s not going to charge me any rental cost but I will be paying for all the expenses on the car.
In such case, can I claim the expenses like insurance (under her name and I am added as listed driver only), CTP, Rego, car servicing?
Also her father will use the car some time, I think as such case I will need to keep a log book ?
Thanks,
Hi Jack, yes, the ATO understands that spouses often share cars, so it’s no problem to claim your car expenses that are in her name as long as they were paid out of your pocket. You must of course have a valid 12 week logbook. There would be no difference in the tax deductions if you transferred the car into your name, and you would likely have to pay stamp duty to tranfer it, so normally there’s no reason to do this. – Jess
Thank you so much Jess!!
Hi Jess,
Thank you for your work!
I have a quick technical question: can you claim “CITY FEE”?
Is it deductible as toll fees?
Much appreciated in advance!
Regards,
Andras
Hi Andras, yes all of those items on your Monthly Tax Summary must be declared as income, and then you also deduct them as expenses, so it’s a net $0 final result. This article on our website explains in more detail about tax returns, and the exact same process applies to BAS’s too. – Jess
Hi Jess, is there any benefit of having a business bank account for good delivery only , Thanks
Hi Shahil, this is a personal choice, it’s completely up to you. Some people use a separate bank account for delivery/rideshare, while others just mix it all with their main personal bank account. As long as you are able to keep good records of your expenses it doesn’t matter. Note that if you do want to set up a separate bank account it doesn’t have to be a special ‘business’ bank account, that is usually just an excuse for the bank to charge you more fees. Any kind of bank account is fine. – Jess
Hi Jess, thanks for your detailed information about all the workings around this very intimidating topic. A couple of weeks ago, I had an accident and had damaged my car while on a shift. I had to pay an excess to my insurance to fix the damage. So, could I claim this as an expense and if yes Does this expense go down as an insurance expense for the car on the spreadsheet?
Hi Calvin, yes you can claim, but only your logbook percentage, not the full 100%, even though it happened while working. Insurance excesses generally don’t have GST, so this is a little tricky in your DriveTax spreadsheet. You will need to use the Registration category (which is a non-GST category) rather than Insurance (which is GST) so that your BAS will calculate correctly. Then when completing your end of year tax return you will need to remember to manually reallocate that amount from Rego back to Insurance before entering the figures into your tax return. Feel free to email directly if you have any troubles with this! – Jess
Thanks Jess, I do UberEats, so I don’t have BAS. Do I still use the registration category or use the insurance category?
Hi Calvin, ah, in that case the GST doesn’t matter so you can put it in as insurance. – Jess
Hi Jess,
I am doing ubereats delivery and earning almost 50k$ from it. But when i am calculating the fuel i paid more than 9000$ to get 50$k.
But my tax agent told me that i can claim only 5000km which is 3000$ in a year. Which means that i am under lost for 9000$ per year.
HI Gon, if you do not have a valid 12-week logbook, then your accountant is correct and you can only claim the cents per km method. But if you do have a valid 12-week logbook then you can claim your fuel and other car expenses x your logbook %.
If you are talking about last financial year, then it would be too late to start a logbook now if you didn’t already keep one that started before 30 June of that year. But if you are talking about the current financial year then it’s not too late, as long as you start before 30 June then you can use the logbook for the whole financial year (although you will have to wait until your 12 weeks are complete before you can lodge your tax return). You can read more here about Keeping A Logbook For Uber. – Jess
Hello Jess, wonderful information – much appreciated. Complicated tax explained in plain language. I have been searching online but have not quite find the answers to this. My wife and I both started driving Uber food deliveries. At the moment, we share one car as our time commitments are different. If we both want to use the log book method, how does that work? For my log book, does it mean all mileage that my wife incurred during Uber would be considered as ‘personal’ to work out my Uber percentages? Vice versa for her? i.e. On her log book, the mileages I incurred to drive Uber would be counted as “personal”? Can we both do the percentages then claim the percentages separately? If she drives it a lot less than me, can we mix/match, i.e. I use the log book method and she uses the CPKM method? Many thanks.
Hi Sean, thanks for the kind words! If a vehicle is shared by two people, you must still just keep one logbook for the car. You’ll need to annotate the trips with each of your names so that you can calculate two separate percentages, but it must be all in the ONE physical/digital logbook. You’ll then take 100% of the car’s expenses and each declare your respective percentages in your tax returns. You cannot mix and match logbook and cents per km methods, it is one logbook and one method of claiming per car. – Jess
Hello Jess,
I thought I would post this question, as I think it’s a grey area and will become more and more relevant for Uber drivers as they begin to adopt Electric Battery Vehicles.
My scenario is that I have started using and EVehicle for Ubering and want to charge it overnight in my apartment car space. I am in process of installing an Electric Vehicle Charger in my apartment building, and given my carspace is in the basement of a large building the installation is more involved and expensive ($4,800 + GST for installation and $1,890 +GST for charger iteself). There is also an annual fee of $195 + GST for software subscription that is needed to ensure body corporate is remimbursed for my electricity usage.
I don’t want to take advantage of the ATO instant asset write-off scheme, and prefer to use the depreciation method based on 85% usage of the EV charger as per my log book. My questions are:
– can I include the cost of installation ($4,800 + GST) as part of depreciation Or is this an exoense?
– is the annual siubscription handdled as a yearly expense item?
– for whatever I can include as a depreciation, I am unsure whether these would handled via a capital or equipment expenditure?
Thanks for your advice.
Mark
Hi Mark, great question! I can’t provide personalised advice here, but allow me to answer in general terms.
You can claim the charger and charging costs in accordance with your logbook percentage, if you don’t have a valid 12-week logbook then you cannot claim. The cost of the charger, including its installation costs, are a business asset, so you can claim Temporary Full Expensing/the Instant Asset Write Off to claim the whole amount in the year you pay for/install it (subject to logbook %). Subscription fees are claimed as an expense (subject to logbook %).
If the electricity itself is billed separately then you can claim according to your logbook percentage. Or, if it just forms part of your general household electricity bill then you will need to use any reasonable method to estimate what percentage of your electricity bill relates to the car, and then claim your logbook percentage of that amount.
I hope this is helpful! – Jess
Hi Jess,
Thanks for answering what you could. it is very helpful.
Much appreciated.
Mark
Hi Jess, I appreciate all the work you put into helping us. The info on your site clears a lot of things up.
Just have a few questions about using the cents/km method.
1 – According to the ATO, if the car you use for uber isn’t under your name, then there’s 2 scenarios; 1 for if the owner gives you permission to deal with the car as your own and pay all related expenses, and another for if you don’t have permission which in that case you can’t claim the ownership costs. Can I use the cents/km method and at the current rate of 72 cents/km, for both scenarios but particularly the second?
2 – It’s very easy to go over 5000km without earning a lot doing uber. So using the cents/km method, if my total taxable income for the year is for eg, $21,800, and I drove 5000km with uber meaning expenses will be $3,600 using cents/km, it means it’ll nullify the tax I have to pay? (21,800 – 3,600 = tax free threshold).
Thanks!
Hi Tim, great questions. The cpkm method factors in all the usual car ownership costs, insurance, rego etc. So if you don’t pay for those then the cpkm method isn’t valid for you. In that case the logbook method is your only option. And yes your tax calculation is correct! – Jess
Got it. Does there need to be proof of payment? What of the arrangement is I transfer the funds to the owner who then uses it to pay for the costs, so it won’t show up in receipts.
Hi Tim, yes you should keep full records of all of your bank transfers, plus the invoices of the actual payments if you are able to get them from the car owner. If you share the cost with the owner then you can only claim for the amount you paid for. If you are GST registered the rules are different, you must have a tax invoice for all expenses over $82.50, and for expenses over $1,000 they must have your name or ABN, otherwise you cannot claim the GST. – Jess
You’ve been really helpful Jess won’t hold you back much longer. Just a few final questions.
1 – Since the GST portion is already dealt with through the BASes, the amount I put in the tax return for my total uber income + uber related expenses (service fee, tolls etc), is those minus the 10% GST for both?
2 – Using Mytax, I see there’s a section to claim the small business tax offset which as I understand0 uber drivers are eligible for. However with the low income and low and middle income offsets as I undertand, uber drivers also qualify for those as long as they meet the income requirements, and it’s something I don’t have to mention in the mytax form, but rather the ATO automatically applies and refunds it to me after I submit the form and they’ve reviewed it?
Hi Tim, yes if you are GST registered then your tax return figures should be excluding GST, whereas if you are not GST registered then you report the full amounts of your income and expenses in your tax return. In MyTax I think there is a box to tick that asks if you are a Small Business and that will apply the offset (as tax agents we use different tax software so I’m not familiar with MyGov, I assume this is the same though), whereas the low and low/middle income tax offsets are applied automatically (yes sole trader JobKeeper income counts for all of the above). – Jess
Thank you Jess
Hi Jess
You’re very effective. I have two questions
1- last year in September 2020 I bought new car around $25,000 (demo version) and I claimed 100% GST. But later I decided to drive Uber as part time. In that case what percentage should I return to ATO.
2- As I’m driving Uber as part time in that case how I can calculate depreciation. I do have log book in which I note down KM driven for uber usage. But I never kept fuel receipts.
I will really appreciate your assistance
Hi Muhammad, I recommend reading our blog post on Buying A Car For Uber, I think it will answer your questions about depreciation. Information about keeping receipts can be found in our blog post Uber Taxes Explained. GST Adjustments are very complex and I’m not able to explain here. You can find information on this page on the ATO website, or you may prefer to have a tax agent prepare it for you.
Hi Jess,
I use my car mostly for uber(98%-logbook), the car parked at garage of my rented unit, the garage is only for the car. Can I claim the garage cost(ie $10/week) as uber business expenses?
Hi Alan, unfortunately the ATO is very restrictive about parking. You can only claim parking fees incurred during your driving shift. You cannot claim parking at your home, the ATO considers this to be primarily a private expense so it is not deducible. This is true even if your car is 100% for business. – Jess
Hi Jess,
Thanks for providing very useful information. I have put my scenario and question below.
I had started Uber driving from Dec 2020 as a part time. I am currently using my car for Uber driver and my company work related travel. Retrospectively, I am using logbook method to claim expenses. I purchased my car in FY2018 and claimed depreciation for 3 years under business percentage use. At the moment carrying amount of my car is around $ 15,000 based last year tax return.
I am not sure since I have started Uber driving from December’2020 am I eligible for temporary full expensing (instant asset write-off) for remaining car value which is $ 15,000 for tax year 2020-2021?
Hi Jay, I can’t provide personalised advice here, but generally speaking, if you have an existing car that you’ve owned for a while and then you start using it for Uber, it treated the same as if you bought the car, which includes the ability to claim the Instant Asset Write Off / Full Expensing. You will need to find out the car’s market value at the time it became a business asset, I recommend searching on the CarSales website for three cars that have the same specs as yours (age, kms, features etc), printing off the ads as evidence, and using the average of their three values. Remember you must also have a valid 12 week logbook. – Jess
Hi Jess, I have bought a new car and claimed full GST in my BAS. I took advantage of the TFE thinking that I am going to drive Uber full time. Last month I was offered a full time job and the pay is far better than driving Uber. My question is, if I stop driving Uber, do I need to pay back part of the GST claimed? What if I drive part time?
Hi Jon, yes, for a major change in the percentage that you use the car for business within the first year after you purchase it you must make an adjustment in the BAS. For example, let’s say the car cost $33,000 incl GST of $3,000, and you initially claimed 100% of the GST in your BAS. But then your circumstances have changed and you will only use the car 50% for business. In this case you must repay $1,500 of the GST in your next BAS by adding that amount to 1A. If you stopped driving altogether you would have to pay back 100% of the GST. Once a year has passed this kind of adjustment is no longer necessary. You can read more information on the ATO website here.
Hi Jess,
Thanks for your great article and efforts in answering questions.
I have read everythjing I can find on topic of tolls, but am still genuinely confused. Yoi say that tolls charges that appear on monthly/yearly tax summaries are in same category as ‘money in, money out’ charges like airport/govt/uber service fees etc which the driver never really keeps as income. You therefore recommend deducting tolls from gross income as we shouldn’t be paying tax on tolls. But drivers do keep this money as it is a reimbursement from Uber for tolls used on trips. So, my question is, if we are altready removing tolls charges shown in uber tax summary from our gross income, does this mean we shouldn’t (as a separate step) then also claim the actual tolls expensese we paid as a further deduction? If we did this, are we essentially claiming tolls as a deduction twice?
Thanks
Mark
Hi Mark, those extra income items shouldn’t be ‘removed’. If you pop up to the section above called ‘How Is Tax on Uber Income Calculated’ under Grey Items, it is mentioned that “in your Uber tax return you’ll declare these amounts as income, and then you’ll also claim them as expenses”. All income items on your Uber tax summary must be declared to the ATO because they are money you receive from the passenger (split fare fees, tolls, city fees, booking fees etc), and therefore legally they are taxable income. Then you’ll also claim these same amounts as expenses, and that’s where the ‘cancelling out’ happens.
For the government fees, split fare fees etc you are claiming them as expenses because Uber keeps those amounts, which technically means you are collecting them from the passenger and passing them on to Uber, and the passing on to Uber part is an expense for you. And for tolls, as you mentioned, you keep that money received from Uber and then you go ahead and pay your actual toll bill using that money, so naturally you can claim those toll payments as an expense.
As a side note, it often happens that drivers incur tolls in between trips, so they don’t appear on the Uber statement, but you can still claim a tax deduction for these tolls too. If this happens for you then you can manually add those extra tolls to your deduction too, so your toll deduction amount will be more than your toll income amount. (If you use the Drivetax Spreadsheet, please see the instructions tab for more on how to handle extra tolls). I hope that explains everything! – Jess
Thanks so much, Jess. This now makes sense to me!
Can i ask one more question? I have read some rulings on ATO website in relation to treatment of tips/incentive/referra/bonus payments from Rideshare compaies. My understanding is that, of course, all payments we receive form taxable income. But in terms of GST treatment, the following is my understanding:
– tips include GST because they are paid to us by the passenger
– once-off ‘appreciation’ payments we may receive (like the one Uber paid to many drivers in April/May 2019) does not have GST because drivers didn’t have to provide specific goods or services to receive this payment.
-any other ongoing incentives, referral fees. bonuses or tops-up we receive from Uber do not have GST for two reasons: 1) They are paid to us via the overseas Uber entitty (in Netherlands), not Rasier Pacific Pty Ltd (which is registered for GST in Aust). 2) These types of payments are not directly linked to providing specific goods and services eg. many of the bonuses relate to whether we stay online during certain peak times.
– However, we should treat any ogoing incentives/referral fees/bonises/top-ups etc we receive from OLA and DIDI as having GST, given that on the tax summaries from these companies these payments show they include GST as they are paid to us from Australian entities.(essentially, this trumps the argument that these payments arent linked to specific provision of goods and services).
Am I right in my conclusions?
Thanks so much
Mark
Hi Mark, The “Driver Appreciation Payment” was a one time only payment in April 2019 that was GST-free. This has only ever happened one time, and it is the ONLY Uber payment that has ever been GST-free.
ALL other referral bonuses, rewards and incentives ARE subject to GST because they are in exchange for services that you provide to Uber, such as going online at a certain time when need they more drivers on the road to meet demand, or referring them new drivers or passengers, these are all classed as ‘services’.
The location of the company that pays you is not relevant. Since you are a GST-registered business, and you are physically in Australia when you provide these services, this meets the requirement in the GST legislation that your services are ‘connected with Australia’, and therefore GST applies.
I hope this answers your question! – Jess
Hi just a quick question I am using my daughter car for uber which she has bought in dec 2017 .and I started to drive this for uber in jan23 .can I claim depreciation? If yes have to claim depreciation in BAS OR RETURN
Hi Apoorva, it’s fine if you are using a family members car as long as it is treated as your car, you have the keys, it is parked at your house, and you can use it anytime you want to. As long as you meet these requirements you can claim depreciation for the car. The amount of your depreciation is calculated by first calculating 25% diminishing value depreciation from the date of purchase up until the date you started driving, and this will give you your opening value for business purposes. You can find calculators online to help you, or if you decide to have your tax return done by DriveTax we would calculate this for you as part of your tax return preparation. Depreciation is only claimed in your tax return, not in your BAS’s, because there is no GST on depreciation. – Jess
Just a quick question about the 70c per km if u did the logbook and say u did 20,000km in a year does that mean u get a deduction of $14,000 or is the cap 5,000km then a percantage??
For example if u made $40,000 in that year the tax would roughly be $8,000 so do u then pay no tax due to the 20,000km or is it just a percantage.
Thanks and happy Easter 🙂
Hi Craig, the maximum you can claim under the cents per km method is 5,000km. So the maximum tax deduction you could get is 5,000 x 72 cents = $3,600. So even if you did 20,000km the maximum you can claim is 5,000km. Note that it is a tax deduction, not a tax saving. To work out your tax saving you have to multiple by your marginal tax rate. E.g. if your marginal tax rate was 35.4%, then 5,000km x 72 cents = $3,600 tax deduction, x 34.5% tax rate = $1,242 saving on your tax bill. So in your example the tax bill was $8,000, then claiming the maximum kms deduction would reduce the tax bill to $6,758. I hope that makes sense! – Jess
Hi Jess,
I worked uber,didi,ola from NOV 2020 TO FEB 2021
I earned about 4000 and only did it part time and as my ONLY job.
I have registered ABN and TFN but I did not register for GST.
I have nothing to lodge when I log into mygov I called the ATO and they manually added activity statements for me to lodge. How do I do this? Do I have to pay taxes?
Hi Joe, I recommend checking out these two posts on our blog for detailed information on how to lodge your BAS’s and tax return for rideshare. The Complete Guide to BAS for Rideshare Drivers and The Complete Guide to Tax For Rideshare Drivers. You’ll find all the answers to your questions in those posts. – Jess
Hi Jess
My car I use for doing Uber part time is on a Novated Lease that I have through my main job. Am I able to claim the lease payments on my BAS statement?
Thanks
Hi Stuart, the short answer is that if the payment comes out of your before-tax pay (i.e. salary-packaged) then no you cannot claim it (because you already got the tax benefit through the salary packaging). If the payment comes from your after-tax pay then you may be able to claim it, but you will need to confirm whether there is GST on the payments or not. I recommend checking out our post on Buying A Car For Uber for more information. – Jess
Hi Jess,
if i worked in a full time job and meantime i do part time work for uber, Can i use small business asset written off rule for any related asset under the uber job? if the uber job is negative income after deducting expenses, can this loss to deduct my full time job revenue?
Hi Richard, claiming losses depends on your gross business income (i.e. gross Uber fees excl GST, before deducting Uber fees or any other expenses). If your gross business income is over $20k then you can claim the business loss against your employee income. Or if your gross business income is under $20k then you cannot claim the loss and instead the loss is carried forward to be claimed against business profits in future years. You can find more information about the Instant Asset Write Off and Temporary Expensing in our blog post on Buying A Car for Uber. – Jess
thanks jess, that’s really help me a lot
Hi Jess,
I want to know if car is under my wife name and I drive it for Uber .which expenses I can claim?Can I drive my wife’s car in 2nd car in Uber because loan is on her name.
Hi Gobind, the ATO understand that sometimes couples buy a car in one spouses name or the other because of finance or other reasons. So it’s no problem to claim all of the expenses. Just don’t forget that you must keep a 12-week logbook for that car in order to prove what percentage of the expenses you are allowed to claim. – Jess
Hi Jess,
Thanks for your valuable information and I just want to know can I claim gst back on new car if it’s under my wife name or she have to apply for abn and gst. Thanks
Hi Gobind, for end of year tax deductions its fine to have the expenses in your spouse’s name. But for GST the rules are much stricter. The ATO says that to claim a GST credit on a purchase over $1,000 the tax invoice must have the buyer’s name and/or ABN. So if the tax invoice has your wife’s name it would not be a valid tax invoice for you. If your wife is not running a business then she is not entitled to get an ABN and cannot register for GST, so I think in this case you would not be able to claim the GST on the car. – Jess
Hi Jess,
Thank you for providing a great deal of information. Much appreciate it. I have an issue with my CARS. I bought one, registered it in my own name, and used it for uber eats purposes for about 3 months. I bought another car ( a more fuel efficient, small) and registered it in the name of my wife. I use this car, 95% of the times for uber eats deliveries. I use the sedan infrequently for uber work. How do the deductions work in my case? Thanks for your advice in advance.
Hi Samir, if you have two vehicles that you use for Uber then you must keep two logbooks. Alternatively, you may like to only keep a logbook for the car you use the most, and claim the cents per km method for the car you use only a little. – Jess
Should I have to keep any bills for fuel? As I have a scooter. Are my recorded kms compared to uber statement?
Hi Aashray, you must have a receipt or record of every expense. This can be a receipt or a bank record. BUT if you are registered for GST then for all expenses over $82.50 you must have a tax invoice, otherwise you cannot claim the GST on your BAS. For a scooter you cannot use the cents per km method, you must keep records of your actual expenses. See our blog post on Tax for Food Delivery Drivers for more information. – Jess
Hi Jess,
Is a deduction possible for smart watches such as the Active2 with its own sim etc?
Thanks in advance
Hi Mike, yes I think it’s reasonable to claim this, but you must apportion how many hours you drive for Uber per week / how many hours you are wearing the watch in total per week. – Jess
Are there any fees of mental pressure of maintaining 5 stars level of service? I mean that’s too much to ask for, how would I know what type of service is required by the rider. When you’re working late nights, it is difficult to clean the vehicle every 15 mins. Otherwise, it would be difficult for a person to maintain the acceptance rate as well.
Hi Abhi, I’m sorry the ATO doesn’t have any tax deductions for that. – Jess
Hi Jess very nice work by you just to ask that i do uber eats, doordash, menulog, sherpa, yello and jimmy brings i have around 20K income this year and weekly around 200 dollars of petrol i pay. What you think my expenses will be according to you. I live in south Australia. Any suggestions will be appreciated thanks
Hi Parth, allow me to direct you to this article on our website which might answer your question.
How Much Will I Actually Make From Driving Uber
– Jess
Hi Jess, Is it a consideration to buy a new vehicle for tax benefit as an uber eats? If so how is this benefit calcualted if I am going to be delivering for the long haul. Also how is the caculation different if earnings is more than $20k?
Hi Andre, I suggest taking a look at our blog post on Buying a Car for Uber. The entire calculation is too complex for me to explain on our website, so I would refer you to the ATO website if you wish to calculate it, but in the meantime this blog post will provide you with the main information. – Jess
Hi Jess,
You are doing an amazing job. Thank you.
I drive for uber on a full-time basis. I rent a car on a long-term basis just to drive for uber. I use this car only to drive for uber. I have my private car which I use for all my private use. Is it still necessary to keep the logbook for the business car?
Thanks in advance
Noble
Hi Noble, thanks for the great feedback! Yes you must still keep a logbook even if your vehicle is 100% for Uber, because the logbook serves as evidence to the ATO of that 100%. – Jess
Hi Jess,
Hoping you are well.
In South Australia, can I instantly write off my vehicle in 2019-2020 financial year?
Thanks
Hi Arsalan, generally speaking yes. Please refer to our blog post on Buying a Car for Uber to learn more about the instant asset write-off. – Jess
Hi Jess,
Can I have a separate ABN for Uber eats and Didi Driving. That way, I do not have to take into account gst for Uber eats as I do not expect revenue to be more than 75000.
Is this possible?
Hi Ghee, no, the ATO only give one ABN per person. You can read more in our Uber GST Guide. – Jess
Hi Jess,
You are doing an amazing job through this portal, well done.
quick question please. I completed my 12 weeks log book on a car but that car got written off few months later. Now I have a another car, nothing else has changed, still driving on same pattern. Do I need to maintain another log book for new car? still going through same fiscal year. Thanks
Hi Ben, thanks for the great feedback! Yes you can continue to use the same logbook when you change vehicles as long as your pattern of usage doesn’t change by +/-10%. – Jess
Hi Jess
Firstly, thanks for all the informative details here on ride-sharing and taxes.
Could you please explain what verification fees are – you’ve them listed in an example but can’t see any details on them in this comment section?
Hi Jack, thanks for your comment. Can you please tell me what you mean by verification fees? There’s no mention of verification fees in the blog post, and I did a search and didn’t find that term anywhere in the comments either?! Feel free to reply here and I’ll get back to you. – Jess
Hi Jess, they’re in the example ” Bookkeeping Spreadsheet for Rideshare Drivers” file e.g.
Ola – January – Tolls/Airport/Parking Fees
Ola – January – Verification Fees
Ola – January – Other Charges from Ola
Hi Jack, ah I see. I’m sorry I don’t know what they are, you would have to check with Ola! They appear on the Ola monthly summary and so I made a space for them on the spreadsheet in line with Ola’s classification as a deduction, but I don’t know what the verification fee is actually for. I don’t think I’ve ever actually seen anyone get charged this fee, if that makes a difference?! – Jess
Hi Jess
I’ve worked it out. There’s a verification fee for going through the National Police Check. OLA states they charge this, but like you said not sure if anyone has actually been hit with this.
Regards
Jack
Glad you got to the bottom of it Jack!
Hi Jess
Your information has really helped me, thank you!!
I do Uber eats and I want to buy a laptop, can I claim it?
Thanks
Harriet
Hi Harriet, yes, but only the percentage that you use it for Uber Eats. – Jess
Hi, glad I found this website, the information is absolutely amazing, thank you :-)
I’m considering starting as an Uber driver but would like to put up a Carport, as I intend on buying an affordable 2nd hand luxury car and would like to keep it protected. I’ll not take advantage of the 2019, $30K instant write off because I imagine I would only have been in business for less than a month by June and the car will be sub $40k.
My private travel is very low (I live 2km from main employment) so I envisage Uber to be the greater percentage.
MY Question, please; Is capital expenditure (I believe that’s its title) on a carport a valid option or even an option?
Kindest regards,
Pete
Hi Pete, thanks for the great feedback! Unfortunately the ATO won’t allow any claim for your carport. They consider any costs related to keeping your car at your home to be a personal expense. That includes if you have to pay for parking at your home (e.g. a council permit) or security costs (e.g. carport, security cameras etc). It is only when you drive your car out of your home for business purposes that the expenses start being deductible. Sorry it’s not better news! – Jess
Hi Jess,
Can a scooter or motorcycle be claimed for ubereats? (Logbook or cents per km)
Thanks in advance
Hi Mike, yes it can, but the cents per km method is for cars only, it can’t be used for scooters or motorcycles. That leaves only the logbook method. You can read more in our blog post on Tax for Food Delivery Drivers. – Jess
Hi Jess
Fantastic website. The article above states that you can claim the full cost of the vehicle lease (“Lease Payments – if you lease your car, the whole amount of your lease payments are deductible”). I understood that that it was the business use percentage from the logbook that I could claim. I.e. 75% business usage, $100 car lease – claim $75 expense.
Could you please clarify.
Thank you!
Hi Tim, you’re right, this is a little ambiguous. This is supposed to highlight that with a lease you can claim the whole amount of the payment, as opposed to a loan where you can only claim the interest portion. Your logbook percentage still applies in both cases. – Jess
Hi Jess
love this website
just one question my employer pays for my car the expenses and repayments that i can use for work can i use it for uber driving ?
thanks
Hi Lisa, that will depend on the contract you have with your employer and whether it allows you to use it for business purposes, so you’ll need to ask them. Uber and the ATO both don’t have a problem with it. In terms of claiming deductions, you cannot claim any pre-tax/salary packaged expenses, but you can claim for any expenses paid for from your after-tax pay. You must have a logbook to claim these though, the cpkm method is not available when you partly or fully salary package your car. – Jess
Hi Jess
Congratulations on the most comprehensive and straight forward information I have found on Uber taxes … well done
If I have purchased a luxury car for private use (~10 months ago) and now want to use it for Uber etc, can I depreciate it?
If so, how does this work? or is calculated?
Cheers
Andrew
Hi Andrew, thanks for the great feedback. The Luxury Car Limit puts a cap on the depreciable value of a car. You can find the rates for current and previous years here. Note that you can use the ‘fuel-efficient rate’ if your car uses less than 7L/100km of fuel (based on the car’s official specs). If your car is over the luxury car limit, then you will use the limit of the year you purchased it as your starting figure for depreciation. You will then need to calculate how much the car depreciated over the 10 months you used it privately, and this will give you the starting figure for calculating your Uber depreciation. – Jess
Hi Jess,
Is the same vehicle claimable for >1 activity such as ubereats and camplify? (Suv towing a camper claiming 30k asset write off and running expenses etc)
Thanks in advance
Hi Mike, yes it’s definitely possible to claim one vehicle across two business activities, or across a business activity (e.g. Uber) and an employee job. BUT you must keep a 12-week logbook and record the kms for each activity separately, all in the one logbook. So in your logbook you would have some entries labelled as Uber and some entries labelled as Camplify. If you don’t have a logbook showing both, then you will be limited to the cents per km method, which gives a maximum of 5,000km per vehicle (not per activity). – Jess
Hi there,
If I drive Uber as well as Uber Eats from Oct 2019, do I have to pay GST for the income I have earned from Uber Eats as well because I am registered for GST?
Thanks
Hi Ben. Yes that’s right. Rideshare means you must register for GST. And the GST-registration applies to your ABN as a whole. This means that ALL of your ABN income, including UberEats and any other ABN you income you may have, is now subject to GST too. – Jess
Hi Jess can you claim
Items required for car cleaning if you clean it yourself such as high pressure hose and vacuum? we detail our cars ourselves so have no car wash expenses.
Hi Vivien, yes you can, but if you also use those items for your home or other private cleaning then make sure you only claim the appropriate percentage for Uber. – Jess
Hi Jess, thanks for sharing your knowledge. I’ve noticed that in the new tax summary, specifically the part of “OTHER POTENTIAL DEDUCTIONS” charges from 3rd parties has a new item called government. before it was just two items Tolls and airports. I also noticed that now with government there the amount increased significantly. Do you know what is government referring to?
Thanks
Maria
Hi Maria, City/Government Fees are fees charged from your State Government to Uber Riders. The funds are supposedly used to fund taxi driver licence buybacks and things like that. The amount is different from state to state, as is the application/use of the funds. So if you’ve seen an increase then it means your State Government has decided to jack up the fees in your state. Rest assured that it is the rider, not the driver, who pays the fee. On your monthly summary you will see it listed as income (i.e. you collect that money from the rider), and then it also appears in the deductions (i.e. you pass it on to Uber, who then pass it on to the government). So from your perspective, and from a tax perspective, it’s money in, money out, net impact of $0. You do not pay any tax on this amount. I hope that explains it! – Jess
Hi Jess,
Thank you so very much for this excellent service you are providing to UBER partner community. Really appreciated.
I have a Pty Ltd business and this business owns a car. I want to use this car for UBER under the Pty Ltd so that all the UBER related income and expenses becomes Pty Ltd business income and expenses along with the income and expenses generated from other business activities the Pty Ltd under takes. Car usage % will be Uber + other Business usage. Question is: Can UBER be done by a business entity?
Hi Shahid, I don’t recommend using a company for Uber unless you have proper bookkeeping software and you employ a bookkeeper, because it is very difficult to account for Uber income correctly under ATO company accounting rules. Also, it doesn’t make sense to do this if your personal taxable income is below $37k, as you will actually pay more tax in the company. Also, if your company is not already registered for GST then you don’t want to use it for Uber because then the company will have to register for GST and you will then have to pay GST on ALL the company’s income. Having said this, to answer your question, this all depends on whether the invoices that Uber generates for your riders on your behalf can be changed to say your company name. If the invoices can be issued as such, then you can drive for Uber in your company. I’m not sure if this is possible, so if you can find this out, this will be your answer. One more note for anyone else reading this, if you do not already have a company set up as this driver does, I strongly do not recommend setting one up for Uber, as the cost of setting one up and having annual financial statements prepared will cost far more than any tax savings you may get. – Jess
Hi Jess,
I bought a car on March for personal use.
I decided to drive uber from April, and then I registered GST and ABN, I am wondering can I claim my GST back for my car expenses with the persentage of the car usage.
Hi Kevin, unfortunately no. You cannot register for GST unless you are genuinely running a business. In the context of Uber this means that you have started the application process to become an Uber driver. So if you bought your car before you genuinely started running your Uber business, then you will not be able to claim the GST credits. Sorry it’s not better news! – Jess
Hi Jess,
I’m looking to buy a new car for food delivery.
– Regarding the purchase, I’m looking to utilise the $30k asset write off. How do I maximise this with regards to business usage etc? Do I need a lot book etc?
– Is there any difference in buying with cash or finance besides claiming interest?
– Can I still claim the car usage deductions either cents per km or logbook method as well as the instant asset write off?
– Are there any considerations if I have used other cars for deliveries throughout the year or is it fine to claim multiple vehicles?
– If I get a payg job and claim many deductions from my deliveries, is it the case that if I generate >$20k self employed income that I can reduce my payg job tax liability?
Thank you very much
Hi Jay, I’m sorry I can’t answer this many questions and level of detail here. I recommend checking out our blog post on Buying a Car for Uber, as I think it will answer alot of your questions, and a few of them are in the article above. I hope these will give you what you need, but if you need personalised advice I recommend our 6-month Unlimited Email Support package. – Jess
Hi Jess,
Great blog, much appreciated for putting it out there, very helpful.
Quick question, I work in City but live far from it, and use public transport to-and-fro, and drive Uber part-time only i.e. after work in the evening and that too in the city.
By the time I get home in evening its already too late and I loose peak Uber hours, to counter that, I now drive my car towards the closest possible train station in City.
Since my move to drive my car towards train station in morning has only risen out of sole purpose of driving Uber in peak hours later in evening, can I claim driven KMs from “Home to Train Station” as business KMs?
Hi Mansoor, the ATO have actually addressed this specific question, so I have a definite answer for you. I understand that your reason for driving to the train station in the morning is to be better placed for Uber in the evening. But in the eyes of the ATO they only look at your physical destination, not your thoughts or reasons. So for your morning trip, they consider your ‘primary purpose’ to be travelling to work, which is private travel and therefore not deductible. Similarly, they say that if you pick up a passenger on your way to work, you can only claim for the kms while the passenger is in the car, not the whole trip, because again the primary purpose is travelling to work. Sorry it’s not a better answer! – Jess
Hi
Is it really easy to do my Bas if you buy drive tax for 47$?
As I never done this before
Hi Ahmad, sure thing! Lodging the BAS is actually the easiest part. The trickier part is collecting all of your expenses and making sure you don’t miss any tax deductions, and then entering them into the spreadsheet. If you are familiar with spreadsheets then you should find it easier, but if you’re not confident with spreadsheets then the 20+ minute video tutorial that is included will show you exactly what to do. Once you have entered all your income and expenses, the spreadsheet will tell you exactly what number to write in what box on your BAS. You can lodge your BAS by logging into your MyGov or by filling in the paper form. Let me know if you have any other questions! – Jess
So we can’t claim our rent as an expense? Or boarding at home?
Hi Pete, you can, but not as a direct expense. Instead you’ll use the ATO’s official rate of 52 cents per hour, and this is designed to cover you for your home expenses, electricity etc. – Jess
Hi Jess
Confuse about these points.
1) We take city fees, booking fees, Levy and Airport fees in BAS as income then expenses. The question, is there same treatment of these reimbursement expenses in Income Tax return? Should we add in gross income and then add in expenses?
2) the incentives, tips and rewards are GST inclusive? Should we add them in gross Sale in BAS?
Hi Muhammad, yes the same treatment applies in your tax return, they are declared as income and then claimed as an expense. You do have to pay GST on all incentives, tips and rewards, so you should include the whole amounts in Gross Sales on your BAS, and 1/11th of these amounts as GST on Sales. – Jess
Hi Jess,
My current annual income through my Full time job is close to 85k. I am not claiming tax-free threshold to cover up any additional tax bill that I will have to pay at the end of the financial year.
Having said that, I only do Uber eats on the weekends..My income from Uber is roughly $400 per fortnight.
Question: Is it a worthwhile option to do Uber eats on the weekends with the above income?
Hi Harry, I can’t say whether it’s worth it or not, as it’s really a personal decision for you depending on how you value your time, and how much a little extra income means to you. I talk about this in more detail in my blog post How Much Will I Actually Make From Uber Driving. I hope it helps! – Jess
Hi Jess. Thanks for a great article! Can you please answer a quick question for me.
I chose to use the cents per km method in my tax return. When I do my BAS how do I claim the GST on items on my bank statement like fuel and car insurance? Can I use a percentage that I think is reasonable, even though I don’t have a log book for tax purposes? Thank you so much.
Hi Nikki, you’re exactly right. A logbook is required for your tax return but not for your BAS. In your BAS, you cannot use the cents per km method, so the ATO allows you to make a reasonable estimate of your Uber percentage in order to claim the GST on your car expenses. – Jess
Hello Jess,
If for example I purchased my car brand new from dealer with Tax invoice dated July/2017 and I started driving for UBER April/2018….i only recorded the 12-weeks logbook (97.5%) for last quarter (APRIL-MAY-JUNE/2018).. Am I still be entitled to claim motor vehicle GST on Purchase (1B) for my Brand New Car, even if I don’t have the logbook record (meaning private use only) from the start I purchased the car? (Note: date purchased July/2017 up to March/2018 “NO UBER DRIVING”).
Thanks for any help/answer form my query above.
William
Hi William, if you were not driving for Uber back in 2017 when you bought your car then you were not entitled to be registered for GST. And if you were not registered for GST on the date you bought your car then you cannot claim the GST. It’s not possible to claim the GST later. – Jess
Hi Jess,
Thank you for all this great source of knowledge in this blur industry!
I do have couple questions that might be stupid but I will ask it anyway.
First of all, I drive my car for Uber Eats (Only) since September 2018 and also use my car for private purposes. Second of all, I was able to calculate my car % usage by using my logbook (Odometer): 27% of my car is dedicated to Uber Eats, the rest is private. I kept all my fuel receipts (Pro and Private) since I started to drive for the platform and I am using the spreadsheet provided by you. Here are my questions:
When I fill my tank with petrol for Uber purposes, should I select “Motor Vehicles Expenses” and let Excel calculate the deduction with my 27% rate? And also, when I fill up my tank with petrol for private usage, should I select “Other GST Expenses” in the category column?
To be honest, I am a bit confused about the categories: “Other GST Expenses” and “Other-non GST Expenses”. If you could enlighten me with that, I would be very grateful!
Thanks a lot again for all your hard work on this Q&A section!
Regards,
Arnaud.
Hi Arnaud, you need to put ALL of your fuel and other car expenses into the spreadsheet, both Uber and private. Then the spreadsheet will apply your 27%. Regarding the categories, you need to use the Motor Vehicle, Mobile Phone and Internet categories for those expenses (so that the spreadsheet will apply your percentages), and the Other Expenses categories for everything else. I hope this helps! – Jess
Hi Jess,
Thanks for this answer, it helped me a lot to understand clearly the percentage usage of my car vs. the private usage.
My situation is the current one: for the FY 2018-2019 I got less than $18,200 (Uber Eats + Employer). I know the tax deduction is not a tax back, which means I will probably don’t need to ask you, tax agent, for help because I am not going to get anything, even though I kept all my records.
Am I right?
Because I could get a great deduction after completed the spreadsheet. Therefore, I would feel sad if I cannot claim anything after working hard for Uber Eats.
Thanks for your help!
Regards,
Arnaud
Hi Arnaud, The first thing to note is that even though you are below the tax-free threshold you still have to lodge a tax return and declare your Uber income. You are correct in what you said, it doesn’t get any better than a $0 tax bill! Deductions only serve to reduce your tax bill, so if your tax bill as already $0 then tax deductions won’t do anything further. And a tax refund isn’t possible either, a tax refund only happens when you have first overpaid tax. It’s not actually money in your pocket, it’s just giving back tax you already paid. So if you didn’t pay any tax in the first place then there is nothing to refund. So you shouldn’t feel disappointed, you haven’t paid a cent in tax, that’s as good as it gets! – Jess
Hi Jess,
How many time could we claim registration & insurance fee? just once or every time?
thanks in advance.
MITO
Hi Mito, as long as you are still driving for Uber and using your car for business purposes you can claim all of the amounts you pay. So for example if you have been driving for Uber for two years then I assume you would pay registration two times. Remember you will need a valid logbook in order to claim. I hope this answers your question! – Jess
Hi Jess, If I had stopped driving Uber, do I have to pay GST back that I claimed for my car? Thanks
Hi Ankit, yes, if you claimed a GST credit on the car when you purchased it, then the ATO requires you to pay GST on the market value x your business-use percentage when you stop Uber. Here’s more information from the ATO. – Jess
Thank you Jess for your prompt response.
Hi Jess,
I don’t know whether you have discussed about the below mentioned question in this thread before.
My question is that whether the GST is inclusive in the NSW CTP Charge shown in Uber Statement and whether this needs to be shown as part of my income (sales) as well in the BAS. I believe that the Booking Fee, NSW Government Transport Levy, Toll fee etc are inclusive of GST and need to be shown as my income (sales) along with Uber fare and I’m eligible for deduction for income tax and GST credit for those fees/ charges. Am I right? Appreciate your response. Thanks.
Hi Mike, this is treated the same at all the other components, it’s essentially ‘money in money out’ for you. You’ll pay GST and income tax when you receive that amount from the rider, and then you’ll claim a GST credit and a deduction when you pass it on to the ATO. – Jess
Hi Jess, Thanks for your reply. i will go through your Tax Deductions posts.
Hi Jess,
First of all thanks for such an informative site and your prompt responses to all questions.
I have a few questions.
I have a permanent job and I am planning to drive Uber in my free time.
Will it be a good idea to drive uber if someone has a permanent job?
What about tax for the second job as a Uber driver?
Can I save some money on the tax return for my car such as depreciation, insurance, registration and other expenses as a Uber driver? Thanks.
Hi Naksha, it is true that if you at a higher marginal tax rate then the tax you pay on any additional income will be higher. (Remember second jobs don’t get taxed extra, it makes no difference whether you earn $100k from one job or $60k+$40 from two jobs, tax is only based on your overall income). But it is a personal decision you will need to make about whether the amount you will take home after tax is worth your time and effort. For some people it is worth it to take home an extra $5 an hour because they really need the money, for others it’s only worth it if they are taking home $20 per hour. It’s a completely personal choice. Regarding tax deductions I think our blog post on Tax Deductions for Rideshare Drivers will answer your question. All the best! – Jess
Hi Jess – thanks for the informative site and for responding to so many questions! I have one for you about logbooks if you dont mind. Say I start rideshare driving in May 2019 and start my logbook with my first trip, I know you can continue to use it over the next 12 week period, but do you wait to do your taxes until the 12 week period is up and then use the calculated business % for the 18-19 year? Or do you have to use c/km for the 18-19 year and only use the logbook method for the year in which it ends. Hope that makes sense. Cheers.
HI Josh, great question. The logbook must be 12 weeks, so if you start your logbook in May or June for example, then you will need to wait until the 12 weeks are complete before you can do your tax return. It’s okay if the 12 weeks finished in the next financial year, as long as it started before 30 June you can still use it. – Jess
Many thanks for the quick reply Jess. I was hoping that would be the case. I’m in that awkward phase near the changeover of years but I guess from a purely mathematical perspective I’d be better off leaving as much car-related expenditure until next financial year (assuming I’ll earn more $ next year) and thus perhaps get a greater tax benefit if I move into a new tax bracket. At least being able to claim depreciation and the upfront setup costs (I made sure to apply first before doing anything else) this year will prove way better than the c/km method. Thanks again.
Thanks Jess – I wonder if you might answer another question for me regarding vehicle registration and insurance costs. Are you able to claim logbook % deductions on these costs if they were incurred prior to being a driver but in the same financial year (e.g. say I started driving in May but had paid for 12 months rego and insurance in February), can I still claim those? Or does the expense need to be incurred after you start. What about fuel? Same thing? Cheers.
Hi Josh, unfortunately no, tax deductions have to be directly connected to earning taxable income at the time they were incurred. This means you can only claim deductions that occurred once you started actively driving for Uber, or in the immediate leadup, such as when you were driving to vehicle/medical checks and other activities that were directly related to becoming a driver. So for example, if you paid a 12-month insurance policy the week before you started with Uber then you couldn’t claim any of it. By the same token, if you only drove for six months but during that time you paid the 12 month insurance renewal, you could claim a deduction for the whole amount. – Jess
Hi Jess
many thanks for your time and efforts
Appreciate if you explain Fuel Tax Credit (FTC) and how it is calculated.
Cheers
Hi Rias, Uber drivers aren’t eligible for Fuel Tax Credits. It’s only for vehicles over 4.5 tonnes GVM. You can find confirmation of this on the ATO’s website here. – Jess
Hello Jess,
Thank you so much for the article! So very helpful.
I’d just like to know if there is some kind of cap as to how much you can claim on fuel costs per Km? Or some ATO table we can refer to?
I was told that we were claiming too much but it appears the tax agent calculated this from the Uber statement, which doesn’t include kms between trips etc. We lease a car which is used 95% for Uber driving. Thanks in advance.
Hi Gaby, the answer to this depends on whether you’re using the logbook method or the cents per km method. With the cents per km method you need to make a reasonable estimate of your kms (up to a maximum of 5,000km), and you need to be able to explain the basis of your estimate to the ATO. The Uber monthly summaries show your ‘on-trip’ kms, but the kms between trips are deductible too, as well as from home to your first trip, and from your last trip back home. So to factor this in, I recommend deciding on a ‘rule of thumb’ multiplier of the kms on your Uber summary. For example, for most of my clients I go with 1.5x the Uber on-trip kms. You can decide what’s right for you, for example if you live further out of town and have to drive some distance to get to your first trip, your multiplier might be a little higher. Remember the maximum cents per km claim is 5,000km, and that this is only relevant for end of year tax returns, not your BAS’s. Alternatively, if you’re using the logbook method instead of the cents per km method there is no maximum you can claim, you just need to have a valid logbook and evidence of how much you spent (e.g. fuel receipts or bank records). There’s no such thing as too much, if you can prove you spent it then you can claim it! – Jess
Hello Jess,
I would like to thank you for providing such useful information on this blog. I was reading on one of your post that at the end of year tax return taxable loss from Uber driving could only be claimed as deduction against employment and other taxable income if gross fares from Uber driving were over $20K.
How is this $20K gross value is calculated? Is this the amount driver received in the bank account from Uber or is this the amount paid by Uber plus all the fees (example Airport fee, Booking fee, Split fare fee, Toll, Govt Levy and Uber service fee)? Sorry I was struggling to understand how this $20K gross fare is calculated.
Hi Danny, to calculate the gross income for the purpose of the $20k loss rules, refer to your Monthly Uber Summaries and add up the Fare Breakdown in the top left section plus the Other Income Breakdown in the top right section. Then divide by 1.1 to exclude the GST. In other words, it’s your Gross Fares plus other amounts received from riders (excluding GST) BEFORE deducting Uber’s Service Fee and other fees. – Jess
Hi Jess,
Great pages, thank you.
I have 2 cars. Car “A” I use for Uber and currently up to week 10 of my logs. Recording every journey as required.
Car “B” was being used for my private kms during the first 8 weeks of logs. I have kept odometer records each time I purchased petrol but did not record every journey. After 8 weeks I no longer have access to car “B”.
As a result my business kms on car “A” is higher than my “normal” usage.
In 2 weeks when I finish the logs can I “add” the car B 100% private kms to my car A logs to give a valid 12 week log?
Or do I need to keep going with car “A” logs til it reaches “12 weeks” of normal usage?
Thanks :)
Hi David, I’m not quite sure I follow. If two separate cars were being used concurrently you cannot add their kms together, they must have two separate logbooks. If car B was a 100% private car then it is irrelevant anyway, it is not deductible because it is 100% private. And in any case if you only recorded odometer readings when buying fuel then it won’t be valid anyway. I recommend you just continue with the Car A logbook until 12 weeks. – Jess
Hi Jess,
Yes it does sound confusing… let me try to clarify.
I bought new car A and started using it for Uber and hadn’t got rid of car B yet.
So in effect I was driving 2 cars for all my day to day driving. Using car A for Uber and car B for private kms.
I recently got rid of car B thus now using car A for ALL kms.
I’m “concerned” as my car A business % will be artificially higher because because it was not being used for private kms driving like it would have if I didn’t have car B.
Currently car A is showing approx 98% business usage but if I didn’t have car B and drove those kms on car A the business % would be approx 85%.
I know I could just keep car A logs and take “advantage” of it… but just trying to show full disclosure.
Hope this now makes more sense?
Am I being too cautious?
Hi David, I think I understand! The ATO require you to begin a new logbook whenever there is a significant change in your usage percentage, generally taken as a +/- 10% change. It sounds like your change in car/usage circumstances resulted in a change of 10%, so based on this rule you would need to start your logbook from the time you got rid of car B and started using only car A. Had the difference been less it probably would have been okay.
Just to add one more layer of confusion, the above rules apply for your end of year tax return, but for your BAS’s you are allowed to make a reasonable estimate of your Uber use percentage. So you have a little more leeway with your BAS’s to estimate a percentage that fairly reflects your overall usage on a quarter-by-quarter basis. I hope this answers your question! – Jess
Hi Jess,
Thanks for the follow up and I’m glad I explained it better. You definitely have helped me work it out. :)
You’re right…. Do a new a new log book that will be more reflective of normal usage and then use it no probs for the next 5 years.
I was hoping if I could “combine” both records as it would save doing the logs “again”. But you’re right best to make sure rather than risk non compliance.
I am thinking I will use the current 12 weeks log to date for BAS and take advantage of my “good luck”. It would be the same result if I used car A for Uber and my partners car (car B) for private usage? Car A for BAS will give me a better percentage my way but I see nothing wrong with that as I can substantiate it under the rules. I have a (valid) log for 12 weeks at BAS time.
Thank you for your time and help. You are very generous.
Hi David, if you have a separate car that you can use for private use then you’re right, that will push your Uber vehicle’s percentage higher. That’s completely valid! All the best. – Jess
Thx,so,if i drove differents cars during the time, i must keep differents log books?? The zions logbook u reccomended doesn t have multiple options to record different cars
Thanks
Hi Giovanni, if you drove two cars at the same time then you must keep two separate physical logbooks, one for each car. Alternatively, if you changed from one car to the other, and the pattern of usage is exactly the same from the old car to the new car, then you don’t have to keep a new logbook, you can just keep using the old one. – Jess
Hi super Jess, a quick one.
If i rent through uber marketplace and using the ca exclusively for work, do i still need to keep a logbook?? Please say no;)
Hi Gio, sorry for the bad news, but yes you do! The ATO required you to PROVE you use it exclusively for work by keeping a 12 week logbook of evidence, otherwise you can’t claim any rental or other car expenses. – Jess
Hi thanks for the bad news;)can u explain the max 5000kms story?? I mean, i ve done 20,000kms in just over 2 months .. for what i read i can only claim expenses on 5000kms?? Thanks
Hi Gio, yes, maximum 5,000kms is correct, which of course is very restrictive for an Uber Driver. This is why I highly recommend you should keep a logbook. That way you will be allowed to use the logbook method instead of the cents per km method, which will give you a much larger deduction. – Jess
Hi Jess,
I have a quick and common question here. Now Uber Australia introduce the in app tip which is paid together with the earning.
Is this Uber tip taxable or not?
Hi Leslie, Yes the tips will be subject to tax AND GST. The ATO doesn’t distinguish between tips, fares and any other kind of business income, all income is treated the same, and it is ALL subject to GST and tax. – Jess
Thanks Jess! I see. Anyway the good thing is that I don’t have to book tips in my system separately :)
Hi Jess,
Could a Go Pro (body cam) be deductible for use while delivering for Uber EATS?
Thanks in advance
Hi Jay, yes it would be deductible. However if you also use the GoPro for private purposes then you’ll need to apportion your claim accordingly. For example if you use it 60% for Uber and 40% private use then you can only claim 60% of the Go Pro. – Jess
Hi Jess,
I found below information on internet but I would seek your professional answer to prove my understanding is right.
“if your tax deductions (including the write-off) are more than your Uber income for the year, this creates a loss, which means you’ll pay no tax on your Uber income for the year. However you cannot claim the remaining loss against other taxable income unless your Gross Uber Fares for the financial year are over $20,000 (excl GST). If they are not, then your loss will be ‘carried forward’ and can only be claimed against Uber profits in future years, or if your Gross Uber Fees exceed $20,000 (excl GST) ”
For my case, I have a full time job earning 85,000 yearly and I also work as a part time Uber driver to support my family.
I have been using one of cars for Uber across this financial year so I will claim its depreciation for this car; In addition, I have just purchased a new car eligible for asset instant write off. My Uber gross income (exc. GST) already exceeds 20,000 for this year and most likely it will lead to an income loss given the big costs above (old car depreciation + new car write off)
So my understanding is that, the Uber income loss for this year can be combined with my full time employment income given the Uber gross income (exc. GST) already exceeds 20,000?
For example:
My employment income is 85,000
Uber gross income exc. GST is 30,000
Uber cost/expenses excl. GST is 10,000
Old car depreciation is 4,000
New car write off is 19,500
Total Uber income loss = 30,000-10,000-4,000-19,500= – 3,500
and finanlly, the total taxable income for this year would be 85,000-3,500=81,500?
Am I right?
Many thanks for your help!
Leslie
Hi Leslie, on the whole you’re correct, your Uber gross income is over $20k, so you can claim the overall loss against your employment income. Two things to note though. Depending on what method you used to depreciate the old car you may need do a balancing adjustment on the old car if you’re no longer using it for Uber, and you may also have to pay GST. Secondly, remember you must have a logbook in order to claim the writeoff. If you’re simply replacing the old car with the new car as your Uber vehicle then you can roll the logbook over to the new car. But if your pattern of usage will change at all, for example, you’ll be using both cars, then a new 12-week logbook is required before you can claim the write-off. – Jess
Thank you so much Jess, well noted.
Hi Jess,
Can I claim Gst portion on car insurance in BAS? Does depreciation have Gst? Also car wash receipt doesn’t have a Gst included in it.
Thanks
Hi Harvinder, yes you can claim the GST on your insurance, cleaning and all car expenses that have GST in them. Depreciation does not GST. With the car wash receipts it doesn’t matter if the GST is shown, you can still claim it. You only need an officially tax invoice showing GST if the purchase about it more than $82.50, otherwise just any record without or without the GST showing is okay. – Jess
Hi Jess, I use my car driving for uber and then to drive to a second workplace after my uber shift. Do I need to claim part of my kms separately for the different jobs or would it all come under uber. And if I do need to separate them how is that done ie driving from uber to 2nd job and from 2nd job back to uber job, which one gets the kms there, hope that makes sense
Hi Joseph, You will need to record Uber kms and work kms separately because they must declared in two separate sections of your tax return. Be sure to clearly mark each trip as either work or Uber in your logbook. Also, I’m wondering if you might be thinking of the rule where you can claim a deduction for travel between two employee jobs? This doesn’t apply to Uber because you’re not an employee, you are working under an ABN. Travel to and from your employee job generally won’t be deductible unless you’re eligible for one of the exemptions, for example you have an itinerant work location (e.g. a tradesperson working from a different job site every week). I hope this answers your question, feel free to email us if you need more information. – Jess
Hi Jess, thanks as always for the great advice!
I recently picked up a hire car for Uber driving. The company is in Sydney and I am located approx 200kms from there. I wanted to know if I can claim the travel from Sydney to home? I am keeping a log book and I forsee the work % of the car usage to be between 95-100% (I have my own private use car).
So would I just record those kms and the business usage percent will just apply to those kms as well?
Thanks, Alison.
Hi Alison, yes you can absolutely include the kms for the whole round trip in your logbook, and it should boost your percentage a little. Or if you used alternative travel to Sydney (train, flight etc) you can claim that cost. – Jess
Hi there,
Would a Dyson hand held vacuum be deductible for UberEATS drivers?
Thanks in advance
Hi Jay, yes a handheld vacuum can be deductible. If you use it only for your car you should apply your logbook/Uber use percentage, or if you use it in your home as well then you should estimate what percentage the vacuum is for UberEats use and what percentage for private car travel plus home/private use. – Jess
Hi Jess thanks for a great article.
My question is I have bought a $35000 car from dealer which includes GST. I have financed that car with a loan over 5 years. I just want to ask can I claim that GST? If yes can I spread that over years s I pay or it has to be claimed all in 1st BAS.
Thanks
Hi Asad, I think our blog post on Buying a Car for Uber will answer your question. – Jess
Hi Jess,
How do I calculate the depreciation of my car for using for Uber?
I bought my car in April 2015 for $9500,
Started driving uber in Feb 2018
Lets say I used the car 85% for uber in Aug 2018
How do i calculate the depreciation of my car?
Thank you
Hi Shaun, the calculation is complex. You will need to calculate depreciation from the purchase date up until your Uber start date at 25% diminishing value (including an apportionment for days in the purchase year and the last year). This will then give you your opening value for when you start driving. Then you can follow the small business depreciation rules to calculate your deduction. These rules are too complex to explain here, so if you’d rather not dig into the rules yourself I would recommend having a tax agent prepare your tax return. – Jess
Hi Jess, I trust you are extremely busy during the tax year but if you don’t mind, I’d like to double check this as I found in one of your other replies, you mentioned that “if you have an existing car that you’ve owned for a while and then you start using it for Uber, it treated the same as if you bought the car, which includes the ability to claim the instant Asset Write off / Full Expensing. You will need to find out the car’s market value at the time it became a business asset, I recommend searching on the CarSeals website for three cars that have the same specs as yours (age, kms, features etc) printing off the ads as evidence, and using the average of their three values.”
Could you please clarify if we owned the car for 2 years or so prior to becoming a Uber driver, do we need to use the purchase price 2 years ago depreciating to today then use that as an opening value to calculate business depreciation, or can we use the market value at the time of becoming an Uber driver? The market value method would be beneficial especially now as second car market seems pretty hot. Much appreciated.
Hi Wendy, normally I would say that the depreciation method is the preferred method, as this has been always been the ATO’s approach. But you’re right that the car market at the moment is in an unprecedented state, and there is a huge difference between depreciation rates and real life market values. I have not heard one way or the other whether the ATO will accept the market value method if they choose the review the tax return. I think it is a reasonable approach given the state of the market, but it is not the ATO’s traditionally used approach so you should proceed with caution. Note that you must not use a figure that is higher than what you paid for the vehicle in the first place, even if the value of your car has increased. Depreciation can only ever be as much as the cost of the asset. – Jess
Hi Jess, If I drive novated lease car for Uber purposes, Can I claim pre tax and/or post tax contributions as a tax deductions?
Hi Ankit, you can only claim the post-tax component as a tax deduction. With the pre-tax component you are already getting the tax benefit by paying out of pre-tax dollars, to also claim a tax deduction would be ‘double-dipping’. Note that to claim the post-tax component you must have a valid logbook. – Jess
Hey Jess,
Great feed! Wasn’t able to find the answer to this one… So I’m looking at renting a car specifically for Uber and you have stated that this repayment is fully deductible as an expense, my question is what if there is nominal personal use of the car as well? Would you need to do a 12 week log book to ascertain percentage of usage or even if there is nominal personal usage can you still claim 100% of repayment.
Thank you, Clay
Hi Clay, thanks for the great feedback. You must keep a logbook to claim your car rental expenses, even if it’s 100% business use. The logbook is required to PROVE it’s 100%, without the logbook you can’t claim the car rental fees at all and you’d be stuck with the cents per km method. It sounds like for you with a little private use your logbook would be just shy of 100%, but the logbook would be required even if you were 100%. – Jess
Hi Jess,
I bought 2014 Toyota Prius V for driving Uber in April for $24,990 (Vehicle price $21,766.27 + Transfer Fee $39.10 + Stamp Duty $1008 and GST $2,176.63).I was registered for GST when I bought the car and I am using this car 100% for Uber. Just like to clarify few things:
In BAS statement (Total sales) G1 is the Gross fares. Do I have to put in the amount including GST or excluding GST?
For claiming GST I paid for car purchase, on 1B (GST on purchases) I will be providing the GST I paid on other business expenses + GST payed on the car which is $2,176.63? Do I have to provide car purchase price anywhere in BAS?
Also when doing end of year tax return when claiming depreciation for the car is that placed in other expenses section? Will it be 15% in first year of just vehicle price or 15% of Vehicle price + Transfer Fee + Stamp duty?
Appreciate your help,
Thanks
HI Rafael, apologies for my delayed response, we’ve been having website trouble. G1 is inclusive of GST, and you need to tick the box just below G1 to say you have included GST. G10, the field for the cost of the car, and G11, the field for the total cost of other expenses, no longer appear on the BAS, so you don’t have to enter these figures anymore. Depreciation is based on the total vehicle price minus GST. – Jess
Hi Jess,
I have a novated leased car from my current full time employer, if I use the car for Uber part time, what can I and can not claim for tax purposes? Thank you very much.
leo
Hi Leo, if you are salary packaging your car then you are receiving your tax benefit through your pay. Therefore you cannot claim a tax deduction as well, that would be ‘double-dipping’. – Jess
Hi Jess,
Hope you can shed some lights.
I cant seem to find information regarding tax deduction situation where 2 different cars are being used.
I’m planning to start UberEats and UberX in the next month.
1st car (under my wife’s name – no finance) will be used for UberEats every weeknights.
This is additional to my main job in which I usually claim maximum cents/km method in my individual tax return due to work travels in between clients
2nd car (under my name – financed) will be used for UberX every weekends.
This car will also be used for personal/family travel.
Q1: Is it possible to claim eligible deductions on both cars separately as I will be using both cars to earn income?
Q2: Can I also claim expenses of insurance, rego, maintenance/service and depreciation on the 1st car, even if its not under my name?
Thanks heaps and regards,
Joe
Hi Joe, it’s no problem to claim for two different cars. You can claim up 5,000km per car per tax return, or use the logbook method for either or both (you would need a separate logbook for each car). It’s fine to claim a car that is in your spouse’s name, the ATO understands that vehicles are often shares between spouses and so claim deductions is still allowed. – Jess
Hi Jess,
1) So based on your reply to Bin, Business income will be gross income – GST ? And Business expense will be all the work related expense including car depreciation x business use percentage ?
2) Can we claim full deduction for Uber fee or its also based on business use percentage ?
3) I have done logbook for continuous 12 weeks for 2016-2017 tax return. Do I still need to do one for 2017-2018 tax return? How long is the logbook valid for ?
Many thanks.
Lucas
Hi Lucas, 1) is correct but in your tax return you must exclude GST from the expenses as well. 2) The Uber fee is 100% deductible, but again you must exclude the GST that was applied from 1 Dec 2017 onwards. 3) Your logbook is valid for 5 years provided your pattern of usage doesn’t change more than +/-10%. If you do change your driving pattern by more than this then you must keep a new logbook. – Jess
Hi Jess,
So when you say in your tax return, all figures must be GST-exclusive, that means including my Gross Income? So my gross Income (Including all the fares) – GST? And as for the UBER fee, I have driven before UBER included GST into the fare so I will be putting that amount in full correct?
Thanks.
Hi Bin, yes, your gross fares and all additional income items must be entered into your tax return excluding GST. For Uber fees you will have to separately calculate Uber Fees before 1 Dec 2017 which didn’t have GST (so you include the whole amount in your tax return) and Uber fees after 1 Dec 2017 which had GST that you must exclude. – Jess
Hi Jess,
I have stopped driving for UBER last October and it is tax time again. If I could ask you a few questions:
For my 2017-2018 income tax return, what happens with the split fare, airport fee, booking fee and UBER service fee? Do I include them in my expenses on my return? If I did, would I report them on gross value or gross value minus the GST (like the rest of the expenses)? – the time in question is from Jun 2017 – October 2017.
And one more clarification, the reportable income I will be using on my tax return is the total gross amount – GST?
I have done my BAS for the 4th quarter last year and the first/second quarter of this year.
Thank you.
Hi Bin, in both your BAS and your tax return, all of the extra fees (Split Fare Fees, Booking Fees, Airport Fees, Tolls etc) should be included as income and also included as expenses, so they cancel each other out. In your tax return all figures must be GST-exclusive. – Jess
Hi Jess. Awesome and informative blog. Thanks for prompt and free ABN registration. I recently applied for my driver accreditation from TSC. However I plan to start taxi next financial year. Can I claim the licence, medical costs in this year tax return?
Hi Sahil, Yes it’s fine to claim expenses in this year’s tax return even if your income doesn’t start until next financial year. You must be able to show that you have genuinely started running your business, which I believe is clear and evident by your application for accreditation. Note though that this won’t affect your tax refund this year, instead the deductions will be carried forward to be offset against your UberEats income next year.
Hi Jess, I bought the car (more than 20k excluding GST) in October 2014 and only started to use it to drive Uber in October 2016. Does small business depreciation still give a better outcome in this case? (15% deduction for the first year and 30% for the subsequent year) given that I cannot claim depreciation for the first 2 years? Same goes to diminishing value method with 200% for the first year which I am not entitled to as well. Is prime cost a better method for my case?
HI Lucas, I cannot give personalised advice here, but for an older vehicle it may well be that prime cost gives a better outcome. The only way to know is to manually calculate all three options. You’re then free to choose the one that gives you a larger deduction. – Jess
Hi Jess, Thanks for your clarification. In term of asset depreciation, in this case which is the car I use to drive Uber, I am using prime cost method to calculate the decline value. May I know how should I determine the effective life of the car ? Is there a general rule from ATO like 5 years or I can say 10 years of effective life? Does it matter to ATO much in this case? Your reply is much appreciated.
Lucas
HI Lucas, if using traditional depreciation most people we usually opt for the diminishing value method as you can claim 200% depreciation, giving a greater up front claim. The effective life of a car is 8 years. Note that small business depreciation usually gives a better outcome than traditional depreciation, you can read more about this on the ATO small business depreciation page. – Jess
Hi Jess, Thank you for your prompt reply. I received a letter from Ato asking me to fix any mistake before they audit me. So I just want to make sure I do it correctly this time before submitting. So the business income will be my gross uber income and business loss will be the uber fee ? Should I claim all the business related expenses including car expense under this ‘business income and loss’ section or should I claim the expenses under the other section corresponding to other jobs with payment summaries provided ? Thanks for your help.
Hi Lucas, all of your Uber income and expenses must go in the business income and expenses section, not the employee section. Your gross income (including all additional Uber charges such as tolls, booking fees and split fare fees) should be declared as business income, and then your Uber fees, all other Uber charges and car expenses are claimed as business expenses. If the ATO have suggested that they may audit your tax return then this suggests the income you have declared does not match your income that Uber have advised to the ATO. If you would like your tax return to be professionally reviewed please don’t hesitate to contact us directly via email or our contact form for personalised advice. – Jess
HI Jess, should we classify the uber income as personal service income or business income in a tax return ?
Hi Lucas, the ATO consider it business income, not personal services income. This is because driving for Uber also includes supplying an asset (your car) as well as your personal labour. – Jess
Hi,
What fantastic information…thankyou.
I am just going through the process of what i need to do. I am notifying my current insurer ( and paying the increase premium) who i won’t name specifically but is one of the big ones that my comprehensive policy vehicle will now be used for ride share. I fully understand that if it is 100 % uber than it is classified as business not rideshare but they are telling me i need to tell them what percentage is my input tax credit…. my understanding which i may be wrong is i can guarantee it is not 100 % so will be rideshare cover but i have no idea what percentage until i do it, it may only be 10- 20 % but i was of the believe i will keep receipts, documentation, log book etc and then calculate the percentage and again if correct claim tax deduction for the amount of GST i have paid for that relevant percent for uber only. Why is it such a big issue to the insurer saying in need to put down the percentage ? I am just wary about saying a percentage which i have no idea and then it not being correct.
Regards Kris
Hi Kris, don’t worry too much about this, as it’s only relevant at claim time. The insurer needs to know this because GST law says that if they make an insurance payout they have to make an adjustment to the payout for any GST you would have to pay to the ATO (you wouldn’t end up out of pocket, it’s just a tax adjustment). If you did actually have an accident they would check this percentage with you before finalising your claim, you can always update and give them an accurate answer then. So for now it’s fine to just give your best estimate of what percentage you expect to use your car for Uber. – Jess
Great article! I have a couple of questions:
1. You mention “Mobile Phone Bills – you can claim a percentage of your mobile phone bill”. What method to use for calculating the percentage? As my plan has free calls and SMS, I can probably count the bill as being 100% for the data. Do I then check what amount of monthly data was used by the UBER app as a percentage of total data used by all apps to calculate the % of my phone bill I can claim as an expense?
2. I have an old (2010) car that was previously only ‘personal use’. Would it have any depreciable value now, that I can write off in this first year of driving for Uber Eats? Or is it deemed to have $0 value?
3a. My ABN that I used to register for Uber Eats was originally setup for a internet design business that ceased trading many years ago (so I haven’t lodged any GST returns for about ten years). As an Uber Eats driver, will I need to lodge BAS statements due to being ‘registered’ for GST?
3b. I have some losses carried forward from that previous business that I haven’t been able to deduct against my salary income. Will I be able to deduct them against my Uber Eats business income?
Hi Ralph,
1) The ATO don’t specify a method for working out your phone percentage, and trying to do it by data use or phone calls is confusing, so I recommend apportioning based on usage time. In other words, in the time you spend actively using your phone, whether for Uber, internet, calls or games, what percentage of that time is for Uber.
2) Standard depreciation on cars is 25% per year diminishing value, so it depends on what the written down value of this would be for your car.
3) From what you’ve described it sounds like you are not registered for GST, but if you are you should just de-register before you begin driving for UberEats
4) Business losses can only be deducted against profits from the same kind of business activity. You can’t claim them against a different activity. – Jess
Hi Jess, thank you for providing all this very useful advice.
I have just become a part-time Uber driver and have a couple of questions about car expenses…
1) I started a logbook 1st April and we are minimizing our personal usage so currently running at 95% business use. If this continues for the 12 week logbook period, does this mean I will be able to claim 95% of all expenses incurred since starting with Uber (even though the car was used purely for private use up until then)?
2) If I use the cents-per-kilometer method rather than the logbook, am I able to claim the difference between the vehicle registration fee (CTP) as it would have been for Private Use vs Booked Hire as a one-off expense?
Thanksk for your help, Paul
Hi Paul, your logbook percentage can be applied for the whole time you were driving for Uber, however if your pattern of usage changes significantly (+/- 10%) from your logbook then you’re required to keep a new one. If you opt for the cents per km you cannot claim any other car related costs, including CTP. – Jess
Hi Jess,
I am delivering UBEReats and will likely earn less than $20k for the year. From the deductions I have already, I am likely to make a loss for the year. My question is, if I buy a car for ~$5k this year with the $20k write off, generally speaking, am I better off? Or should I wait till next year and use the depreciation option?
Thanks!
Hi Jay, since your gross income will be less than $20k, the loss you make from Uber can’t be claimed this year, and instead will be carried forward to be offset against any Uber profits you make in future years. The write-off on the cost of the car will make your loss larger, and will be added to the amount that will be carried forward. In other words, it won’t make any difference in the current year, and will only be deductible in future years of you have Uber profits to offset it with. Check out our new blog post on Buying a Car for Uber for more information. – Jess
Hello Jess,
Thank you for answering these questions!
I have a photography business which is pretty much a service business with most expenses things such as home mortgage costs for busimess use, rates, etc etc.
As i only earn under 30k im not registered for gst amd wouldmt make mich sense to be, i want to start uber but was womderimg if you can start another business name under existimg abn which is solely for uber and registed for GST so im only payimg gst for uber, not on my small photography income also.
Is this possible?
Cheers
Nick
Hi Nick, no unfortunately it’s not possible. Your GST registration covers your whole ABN, and therefore all of your business activities, so you would have to pay GST on your photography income also. This is frustrating for business owners who want to start Uber driving, but unfortunately there’s no way around it. – Jess
Hello Jess. I am going to start driving Uber from this weekend and will be driving only on the weekends as I have weekdays job. My question is related to logbook. You mentioned in previous posts that logbook should be maintained for consecutive 12 weeks period in the financial year. How will that work if I am working only on the weekend? I will only have 2 entries in it per week (Saturday and Sunday). Are 2 entries per week (2 x 12 weeks = 24 total entries for 12 weeks in Logbook) enough to claim expenses for the year? I am using this car 100% for Uber so no private usage on it. Thanks
Hi John, yes that’s absolutely fine. If your car is only used twice a week for business then that is exactly what your 12 week logbook should show. – Jess
Hi Jess. You mentioned earlier that when buying from private seller you should have seller write you a receipt for ATO to accept this as a proof of purchase for instant asset write-off and you also mentioned that $20K should include registration transfer fees and stamp duty.
In my situation I am buying a car from private seller in Queensland and I will be paying for RWC, full registration and stamp duty here in Victoria. Seller will only give receipt for amount he got from me which is $18K but I will be spending for RWC, registration and stamp duty (nearly $2K over $18K). Will I be able to claim full $18K +$2K for instant asset write off? Also will I be able to claim GST that I would pay in $2K part (I am registered for GST at ATO). Thank you in advance.
Hi Dan, if a car is bought from a private seller this it generally won’t have GST on the purchase price, so there is no GST for you to claim back. However if you pay any GST on your on-road costs then you can claim that GST back on your BAS subject to your business-use percentage.
Regarding the instant asset write-off, you can only claim this if your car purchase price plus on-road costs (excl GST) is $19,999 or less. If you go over this amount you will have to depreciate the cost of your car over a number of years. Both of these methods would also be subject to your business-use percentage. – Jess
Hello Jess. I have primary job (Monday to Friday) where I pay marginal tax rate of 37%. I am planning to drive Uber on weekends as second income for which I am buying a car just for uber worth $20K. I will be doing instant asset write-off for this when I do my tax return. I understand that this instant write off will only be against by business (Uber) income if gross fares are under $20k and any loss has to be carried forward and can be claimed against business profits in future years.
My question is if gross fares are above $20K next year can this loss from previous year be claimed against the total income (including employment income) or will that be still just against business profit?
Hello, you are correct, if your gross fares are over $20k and yet you still make a loss, you can claim that loss as a tax deduction against your employment or other income. – Jess
Hi, its been 1 month i am maintaining logbook, but i want to submit my BAS (GST). how can i determine business and personal use to claim the maximum GST expenses?
Hi Mohammed, for your BAS the logbook doesn’t have to be complete, you can use the figures you have so far in your logbook to make a reasonable estimate of your percentage of Uber use. – Jess
Hi Jess,
To expand a bit on Mohammed’s question – if he subsequently completes his logbook and his business use percentage is lower than the estimate he used when submitting his previous BAS, is he required to make some kind of adjustment?
The situation I’m thinking of for myself is buying a car for mixed personal/business use. Say I pay $1,500 in GST on the purchase price of the car, and like Mohammed, I need to submit my first quarter’s BAS before completing a 12 week logbook.
Let’s say my incomplete logbook suggests 80% business use, and I get a GST refund of $1,200. After the logbook is complete, let’s say it shows a lower business use percentage, say 50%, are there rules about adjusting for the previous quarter? (i.e. do I need to give back $450 of the refund I got?) or is this something the ATO would look at on a case by case basis during an audit, and decide if my method for estimating the initial business use percentage was reasonable or not?
Thanks for all these answers by the way, you’re doing a great job.
Hi Hugh,
Great question! For GST, the ATO doesn’t require you to make adjustments retrospectively if your business use percentage changes. You just need to show that the percentage you applied was reasonable based on the data and knowledge you had available at the time you made the claim. However this is of course a little open to abuse, so if you knew you usage of the car would drop off in the foreseeable future this should be taken into account when making your claim. Remember these rules are only for GST/BAS, for your end of year tax return you cannot make a ‘reasonable estimate’, a valid logbook is the only way to claim, and the logbook must be re-done any time your pattern of usage changes significantly (rule of thumb +/- 10%). – Jess
Hi Jess,
If my gross Uber fares for the year is below $75000, do I still need to remit GST to ATO?
Thanks,
Den
HI Den, Yes you must. The $75k limit does not apply to Uber or taxi drivers, you must remit GST from the first dollar you earn. – Jess
Hi Jess,
I registered for ABN and GST few days ago with intention to drive Uber. I signed up with Uber for driving more than a year ago but never selected car I will be driving in the signup process since I did not had eligible car for Uber.Finally I am going to buy a car which is costing me $20K. This car is from a private seller so I am not paying any GST. Only proof I would have to show ATO that I paid this amount to the seller is copy of Bank Cheque. I will have to pay for stamp duty and transfer which will go above this $20K. Will I still be able to claim write off for the cost of the car? Thanks
Hi there,
When buying from a private seller you should have the seller write you a receipt. This can be a simple note written on a piece of paper that has both your names and contact details, details of the car and the purchase price, the date, and both your signatures. The ATO will accept this together with your copy of the bank cheque or your bank statement as sufficient proof.
Regarding the instant asset write-off, the ATO specifically says that the total cost includes any amount you spend ‘installing the asset ready for use’. For a vehicle this would include registration transfer fees and stamp duty. So it sounds like you will be over the $20k threshold. This means that you can still claim the cost of the car, but instead of claiming up front you’ll claim it as depreciation over a number of years.
Enjoy your new car!
– Jess
Hi Jess,
I have been offered a delivery job at a local restaurant which would be in addition to my PAYG day job, UBEREATS driving and investment income.
If I was to take this 2nd delivery job, generally speaking, am I better off being employed PAYG with them or just work as a contractor under my ABN?
Thank you in advance!
Hi Jay, this is a little too complex to answer here, as there are pros and cons to both, and many of them depend on your personal circumstances. The biggest factor will be that they’ll likely offer you different rates of pay for the two options, because if you’re an employee they have to pay super, sick leave and workcover, and it’s more hassle for them in general. The up side for you being an employee is that they’ll put the tax aside for you, whereas if you’re a contractor you have to do that yourself. You’ll need to weigh up the pay rate against these factors. – Jess
Hi Jess,
I’ve finished driving for Uber in sept 2017, but kept it all open in case I needed to take it up again. I’ve now decided I can shut it all done, but need to check what My obligations are in de-registering from gst, closing down abn? What do I need to consider? What about my car? Are there different options regarding dealing with gst on my car? Many thanks & kind regards Philippa
Hi Philippa, you can deregister from GST, and if you’ll no longer be carrying on any business or enterprise then you will need to close your ABN as well. You can do this yourself for free by calling the ATO, or we can do this for you, our fee is $66. If you haven’t driven since September I would recommend asking for the cancellation to be effective from the 30th of September if possible so that you won’t have to lodge any further BAS’s. If not, remember you must lodge for each quarter in which you were registered for even just one day, even if you didn’t drive. Regarding your car, you may or may not need to pay GST on the market value as of the date you deregister. If you claimed GST on the purchase of the car you definitely must pay adjustment GST on de-registering. If you owned the car for may years before registering for GST then you do not have to make an adjustment. If your case is somewhere in the middle, you should contact us for personalised advice. I hope this helps! – Jess
Hi Jess,
I am an UBEREATS driver and have a question about the logbook.
My situation is that I started driving with my private car and then later bought a car to use 100% for UBEREATS.
I intend to claim the cents per km option for my private car that I used initially then the logbook for the other car. Is this okay?
I already completed 12 weeks of my logbook however I was sick for 1 week out of the 12 and did not drive. Do I need to do another 12 weeks of logbook to have a valid logbook?
Also, if I buy a new car for UBEREATS, will this have a tax benefit for me from the purchase? Will I need a new logbook?
Hi Jay, you will be able to claim a tax deduction for depreciation of the new car, or if the car cost below $20k you may choose to claim the purchase price up front. However if you earned less than $20k in gross income from UberEats then you can only use these claims you reduce your UberEats tax bill to zero. You can’t claim it against your other income (e.g. employment). You would instead have to carry the deduction forward to be claimed against UberEats profits in future years. Essentially this means the tax benefit may be much smaller than what it first appears.
If you swap one car for another and your pattern of usage doesn’t change then you do not need to keep a new logbook. This is only required if your pattern of usage changes, the car itself is not relevant.
Jess
Hi Jay, yes it’s fine to use two different methods for two different vehicles used for UberEats as you described. And the logbook is no problem, as long is it covers a 12 week period it’s fine you didn’t drive for a period of time during that 12 weeks (illness, holiday etc). – Jess
Hi Jess,
If I have $70k employment income and $10k loss on first year of driving with uber($5k income and $15k allowed expenses), can the loss be deducted from my employment income when is submit my yearly tax return?
Thanks,
Den
Hi Den, unfortunately no. The ATO doesn’t allow you to claim business losses against employment income unless your turnover (gross fares) was over $20,000. If gross fares are under $20k the loss has to be carried forward and can be claimed against business profits in future years. – Jess
Hi Jess, I am considering renting a car SOLELY for Uber purposes and was wondering if I could claim the FULL weekly rental PLUS petrol for the car without keeping Log Books. I have a Private vehicle.
Hi Keith, you must still keep a logbook, even if the car is 100% for Uber, and even if you have another car for private use. You have to PROVE to the ATO that the car is 100%, which requires a logbook. – Jess
Another one Jess – am I able to use an ABN in a Trust Name as “my ABN” for Uber and then distribute the profits at the end of the year to the Trust beneficiaries? Common sense says “no” as the income was derived solely from my activities. Thoughts?
Hi Kim, this is unclear. Traditionally you would be allowed to trade in a trust. However the ATO has indicated that they’re investigating whether driving for Uber in a company or trust is allowed, and although we’ve been waiting for months they are yet to provide a solid answer. Also keep in mind that unless you already have a trust set up, the cost of establishing and running one for Uber usually far outweighs the tax savings (if any). If you already have a trust, Uber could impact the tax your other business activities, especially in relation to GST. You should book a consultation for personalised advice if you’re thinking of going down this path. – Jess
Hi Jess, I am going through the signup process with Uber QLD as we speak. It is now quite an expensive and involved process due to new legislation effective mid Jan 18 (which is probably a good thing as only the serious Drivers will be able to justify the expense and compliance processes). I suspect that there will be a big drop off in the next few months.
Anyway, I intend to use a car that is registered in my wife’s name rather than buying/renting a car in my name (dipping my toes in the water). To keep things simple for the 17/18 tax year, I was going to use the cents per km method to claim expenses and then review in June. My questions are these:
1/ Is it still OK to claim this even though the car is not registered in my name. I was simply going to take the odometer reading when I went “online” and then take it again when I went “offline” and add the total km’s up to June 30 and claim them at 66c per km (to a max of 5,000 km)?
2/ I assume that there is no GST implication here and that I can’t claim this as an input credit – instead, it is simply used for calculating my nett income at the end of the year for nett profit from Uber activities.
Appreciate your input – if I stick with it I will be in contact later in the year to review my options for 18/19.
Thanks.
Hi Kim, the ATO recognises that spouses may buy assets in either name, and so they do accept deductions for vehicles and expenses in your spouse’s name. Regarding your car expenses, if you want to claim GST on your car expenses you cannot use the cents per km method, you must keep records of the actual expenses. The ATO will accept an estimate of your business use percentage for your BAS’s/GST, you don’t need a logbook. The logbook is only required for end of year income tax deductions, and only of you’re using the logbook method to claim. If you’re happy to use the cpkm method instead you are allowed to estimate your kms (up to 5,000km), you don’t need a logbook at all. I hope this answers your question! – Jess
Hi Jess,
Appreciate all the questions that you have answered as many of us are in the very early stages of understanding the complicated tax issues.
My question to you are as follows:
1. For BAS – We have the following Fare Breakdown eg Gross Fares, Split fares, Tolls, Miscellaneous, Airport Fee and Booking fee – Which of them is GST inclusive and which is not. Also for Uber Service fee, as an expense is it GST inclusive or not. Also provide the dates if possible, when any GST free item became GST inclusive or vice versa.
2. I am unemployed and could not gain any employment, so I was not able to buy a car to drive for Uber. So my daughter (she is employed) assisted me ONLY in buying a car under her name. and I am driving it with logbook recordings. I pay all the installments and dues to the car finance company. What deductions can I claim, and can I claim depreciation specifically? My payments towards the monthly installment – can I treat them as expense?
Kind regards
Jerome
Hi Jerome.
1) On the income side of things, you will pay GST on all amounts except the ‘referrals and incentives’ received from Uber (these amount appear under ‘Other Income’ on the right hand side of your Monthly Uber Summary). Uber’s Service Fee includes GST as of the 1st of Dec 2017.
2) You can claim GST and tax deductions on all of the vehicle running costs, but possibly not on the purchase of the car itself, you should seek personalised advice on this. See our blog post on Tax Deductions for Uber Drivers for more information on deductions for car loans and depreciation.
– Jess
Hi jess,
what a valuable thread this is. i got heaps of info reading through all Q & A. thanks for your support. im not sure whether this question has already been clarified by you, however, pls help me to get it understood. tnx.
the GST portion of “Uber Service Fee” can be claimed back under BAS GST Credit from 1st of December onward as per following thread. Further, Uber Service Fee which was charged before 1st of Dec 2017 was not consist of any GST portion, hence, we cannot claim GST credit on Uber Service Fee which was before 1st of Dec, pls correct me if i have been misunderstood.
— Dil
Hi Dil, you are absolutely correct. There was no GST on the fees prior to 1 Dec, so nothing to claim back. From 1 Dec onwards Uber will charge you GST so you can claim this back on your BAS. – Jess
Hi Jess, Thanks for the clarification. pls have a look of below whether I have misunderstood the explanation.
based on the explanation given under the Uber Partner Agreement GST information, FROM 1 December 2017 : Rider pays $10 as the Total Fare. This $10 includes GST portion of $0.91 (i.e. $10/11). Uber charges driver 25% service fee which is $2.5. i believe this $2.5 service fee has an GST portion which is $2.5/11 = 0.2273 which is eventually Uber has to pay this portion to ATO. my question is why Uber again charges another $0.25 portion from Driver which is mentioned here as “GST on Service Fee”. for me, that $0.25 is an amount which should not be taken from Driver. pls support to get this clarified. Thank you ¬ Dil
Hi Dil, This is difficult to explain. Essentially there are two separate transactions. The first is Rider > $Gross Fare$ > Driver (you). You are GST registered, so you will charge the rider GST and pass this on to the ATO. Then the second transaction is Driver > $Service Fee$ > Uber. Uber is now a GST registered company so they will charge you GST, but you can claim this GST back from the ATO. We will be publishing a blog post in the next week or so that explains in greater detail, so stay tuned. – Jess
Hi Jess sorry forgot to ask does the car need to be new to claim the $19,9999 deduction or can it be a second hand car from a dealer?
Hi Stephen, it can be new or second hand, you’re eligible either way. – Jess
Hi Jess, re the $20,000 purchase price for the tax write off does it need to be under this inclusive of GST or can it be $19,999 plus GST
Hi Stephen,
If you are registered for GST at the time of purchase, then it’s excluding GST (i.e. maximum $19,999 plus GST). This is because the ATO assumes you’ll claim back the GST you paid, therefore your net out of pocket cost is $19,999.
If you are not registered for GST at the time of purchase, then GST is irrelevant to you, and so you must go by the total cost of the car (i.e. maximum $19,999 including GST).
– Jess
Jess,
If I lived in country NSW and used splend to rent for a 6 weeks period in say Sydney or Newcastle and went home after the 6 weeks and spent 2 to 3 weeks at home before doing it all again could I claim food and accommodation as a deduction against income earnt in this period. I would still be helping to maintain a residence in country NSW for my family and for my self when not driving for Uber.
Also would costs associated in transporting myself from country NSW to Sydney or Newcastle be deductible as well as a business expense.
Cheers
Hi Kevin. Great question, but this is one I can’t answer here. I can’t give such personal advice in this format, and in any case the answer isn’t immediately clear so I’d need to know more from you before giving any advice. Please feel free to book a general consultation (follow the Book Now link at the top of our homepage) if you’d like to discuss. – Jess
Hi jess,
Thank you for your interesting forum.
I have no current business, ABN, etc. and have never been an uber driver. Planning to driver for the next few years. If I register for ABN in November and buy a solely uber car for 15k the next day, will I be eligible to write off the purchase in deductions?
Also, I read in a comment that you need to start log book by 30 June but I couldn’t work out if there are implications if I start in November.
Hi Shane,
Yes you’ll be able to claim a deduction provided you keep a valid logbook. You can start your 12 week logbook anytime during the financial year, but you must start by 30 June of that financial year to be valid for that year’s tax return. So in your case you must start by 30 June 2018. You’ll also be required to register for GST if you’re driving for UberX, meaning you can also claim the GST back on your car purchase provided you’re registered for GST on the date of purchase. Note that to be eligible to apply for an ABN and GST registration in the first place you must have ‘commenced business activities’, which in your case means starting the Uber application process. Therefore I recommend starting the sign-up process before you buy your car in order to show you have commenced business activities and are eligible to apply. – Jess
Hi Jess, I’ve only driven a couple of times so my Gross fare is only $260. In regards to GST on purchases in BAS, does that mean GST expenses such as fuel? My fuel expense is only $15. So GST purchase = 15/11? Thanks for your help.
Hi David,
That’s right. You should add up the GST on all of your expenses, and this figure goes at 1B on your BAS (GST on Expenses). Note that you should only claim a percebntage of your car expenses such as fuel. For example if you spent $100 on fuel, and you use your car 60% for Uber, then your GST claim will be $60/11 = $5.45. – Jess
Hi jess..hope u can help me out..i am renting a car from my someone to drive for uber and paying $300 a week..for quarterly BAS can we deduct this as a whole amount or as a gst on $300..can we also deduct other car expenses like fuel, insurence,service, tyres etc for BAS..
Hi Arif,
You can only claim a GST credit if you were charged GST in the first place. So the question is whether the person you are renting from is a GST registered business charging GST, or just a private person who is not registered for GST. Assuming they are not registered for GST there will be no GST for you to claim. You can claim back the GST you paid on all your other running costs. – Jess
Thanks heaps for that, also if you buy the car as not drive away, and then get rego and pay stamp duty does this add on to the price of the car or is it seperate considering you have a receipt for the car gst exclusive for under $20000. Thanks again
HI Andre,
Good question. I believe the stamp duty would be included as part the cost of acquiring the car even if it was paid separately, but the registration could be considered a separate cost. I’m not 100% certain on this though, so please contact us for a consultation if you’d like a definite answer before making your purchase. – Jess
Hi, if I buy a car for $21950 to drive for Uber 50% and personal the rest can I still claim the 20000 write off or would I have to drive for Uber 98% of the time to get it considering gst. Thanks so much really appreciate it.
Hi Andre,
To get the instant asset writeoff the GST-exclusive cost of the car must be under $20,000. You will need to check your tax invoice to see if this is true for your car (remember some parts of the cost your your car may be GST-free, the GST may not be exactly 10% of the cost). Your percentage of use does not make a difference, your eligibility depends on the cost of the car excluding GST BEFORE adjusting for private use.
Jess
Jess, What a Wonderful article! Thanks.
I read a few comments under this article and at one point, you suggested that car depreciation be calculated at 15% for the first year and then 30% hereon. However, I am using the Diminishing value method and for that what would be the effective life of the car being used for UBER?
Hi Neil,
If you’re using traditional depreciation, the effective life of a car is 8 years. Note that when using the diminishing value method under traditional depreciation you are entitled to claim double the depreciation rate, so that means a 25% DV depreciation rate. Also keep in mind that using traditional depreciation you must apportion your claim for the number of days you owned/used the vehicle for business, whereas with small business depreciation you don’t have to apportion, it’s just a flat 15%/30% per year. I hope this answers your question! – Jess
Jess,
Thank you for the info. Its much useful as well as shocking, given the responsibilities of the UBERX in paying GST is equivalent to Taxi service but car depreciation is treated equal to normal car use. I guess, it should have been somewhat in the middle ground say 6 years.
May i ask a quick last question, I bought the car before having an ABN (starting to drive for UBER), and ATO told me i cannot claim GST for that reason. So, would i include GST in the total cost of car when calculating Depreciation?
Hi Neil,
I see exactly where you’re coming from, the inconsistency is frustrating! You’re absolutely right about the cost of the car for depreciation, you must deduct any GST you have claimed, which in your case would be $0, so the depreciation cost will be the whole purchase price including GST. – Jess
Hi Jess,
I do ubereats only as my car(coupe) is not available for uber.
I have been doing it for a month now, was wondering if I need a ABN to do ubereats? I have heard that solely doing ubereats don’t need ABN and don’t need to register for GST. Is this true?
If I don’t have a ABN, can I still claim tax on my car usage provided I have log book with full details of my car usage.
If I apply for ABN, will I still get the “uber fee” deducted from my delivery?
With the logbook, do I write start location and end location both as home?
Hi Yokas,
Yes you must have an ABN to do UberEats, but you don’t need to register for GST. You can read more information in our blog post on Tax for Food Delivery Drivers. I believe the Uber Fee still applies either way. For your logbook, yes home is the location for the start and end.
– Jess
I decided not to drive for Uber after getting an abn and registering for gst. Do I need to advise the tax dept or can I claim exes to date without any income.
Hi Jom,
You could potentially claim any costs of your Uber application process if you can show the ATO you had a genuine intent to proceed with becoming an Uber driver. However these deductions can only be claimed against Uber income, so if you don’t ever drive for Uber then you will never be able to claim the deductions.
You should deregister for GST with the ATO so that you won’t have to lodge any further BAS’s. Remember you must lodge a BAS every quarter even if you did not earn anything.
– Jess
Hi, i basically have no receipts at all for my fuel expenses as lost my receipts box. As the UBER tax summary shows the kilometers driven, can i work out the fuel costs from those kilometers and work out the GST on that fuel and claim as GST input tax credit.
Any professional advice would be appreciated. Thank you
Hi Max,
For GST on your BAS’s you must have a specific record for each transaction, we can’t use our own calculation method. However for any transactions under $82.50 it doesn’t have to be a tax invoice, your bank statements are acceptable. So any time you filled up less than $82.50 and swiped your debit or credit card you’ll still be able to claim the GST. I recommend that drivers should always pay with EFTPOS or credit cards for this exact reason, just in case your receipts go AWOL. You should always purchase water, mints or personal items as a separate transaction so that you know each fuel transaction is 100% fuel.
For income tax the rules are different, you can calculate your fuel costs based on kilometres and odometer records at the start and end of the year.
– Jess
Hello Jess,
I have full time job which I do Monday to Friday. I was thinking of driving Uber may be around 10-12 hours on the weekend for some extra cash for which I was thinking to buy a used car within range of $20,000 and do instant asset write off when I do my tax return in July 2018. Do you think its possible to do this?
Also I have to buy the car first and then register for Uber (I dont have Uber driver account yet). Is that ok to buy car first and then register it for Uber and still claim asset write-off next year in my tax return?
Thanks and Regards
Hi jess,
I have a restaurant business which operate under company and i drive Uber under this company. As the restaurant business is not doing good, the Uber income help me to maintain various cost associated with restaurant and salary payment to employees. Is this ok? One of my friend advised me that i can not do this as i am practically use Uber income to offset other expenses. He said my income falls under PSI.
Please advise.
Hi Hasan, I can’t provide information about your personal circumstances, but I can confirm that Uber is not PSI because you using as asset as well as your personal efforts to provide the service. You can find more detail on the ATO’s Personal Services Income page. Also, even if it were PSI, you would pass the results test AND the 80% rule. So it is definitely not PSI. – Jess
Hi Jess,
Just to clarify, I can claim the uber fee under expenses in my end of year tax return? But I have to include it in my bas under gross sales? So there’s no such thing as a tax exempt income with regarding to the net income I get and the uber fee I pay.
Thanks once again.
Hi Vin,
On both your BAS and your tax return, you declare your income as your Gross Fares (including tolls, split fare fees, airport fees and booking fees) before Uber’s fees have been deducted. Then, in your tax return you can claim the Uber fees as an expense. This means that overall you are only taxed on the net amount that you received in your bank account. On your BAS though Uber don’t charge you and GST on their fees. This means there is no GST to claim back because you didn’t pay any in the first place. The only thing that is exempt is that any referral/incentive income you receive from Uber is exempt from paying GST. You still have to declare it as income on your tax return though. – Jess
Hi Jess,
I have been driving uber for a couple of months now and this is my first end of year tax return as uber as my primary income. About the uber fees, I have read somewhere that they are tax deductible expense for the end of year tax return but not in the bas. Is this true and can you elaborate a bit about where in the tax return would that expense be applicable? Thanks
Hi Vin,
Uber don’t charge you GST on their fees, which means there is no GST for you to claim back on your BAS. However you can claim the whole amount of the fees as a tax deduction on your end of year tax return.
Your Uber income and expenses are all declared in a ‘business schedule’, which is an extra section within your usual tax return.
Jess
hello Jess. I have read a lot of the q’s and a’s here and found a lot of valuable information. i don’t want to go over information you have already provided but just a question regarding my situation. I receive a pension through state super at a tax rate of 15%. Will my Uber income be taxed at the same rate. And I have purchased a vehicle prior to registering for Uber. Does that mean that I cannot claim any of the $20,000 set up on offer. I am seeing my accountant next week but good to find out in advance what I am entitled to. I can see we may lose a few Uber drivers if this all becomes too difficult for some. Thanks for your information so far.
Hi Pete,
Thanks for your message. That tax rate of 15% is a concessional rate just for your super, it won’t apply to your Uber income. That will be taxed at normal marginal tax rates. Regarding your vehicle purchase, if you weren’t registered for GST at the time you purchased the car then you won’t be allowed to claim the GST, but you can still claim depreciation on your end of year tax return, including the $20k write-off, provided the purchase is eligible and you have a valid logbook.
All the best – Jess
Thanks Jess. I wasn’t quite sure, as it was money coming from an overseas company, and not from my passengers.
Hi Jess. Thank you so much for this very helpful thread. I received a $100 payment from Uber for signing up another driver. Is this regarded as part of my gross income on BAS and my end of year Tax Return. If so, can I claim it as a deduction, as I have not received it for driving passengers around. Thanks, Gary.
Hi Gary, The referral payment is income that you received, so you will have to declare it and pay income tax on it, just like you pay tax on employment income, bank interest and any other income. You can’t claim a deduction for it. For your BAS it’s a little different. Referral payments from Uber are GST-free. So although they must be included as income at G1 on your BAS, there is no GST to pay at 1A. If you need help preparing your BAS be sure to check out our BAS services page! – Jess
Hi Jess,
Thank you so much for all the wonderful information ans resources you have provided for free and continue to respond to questions in this forum. Very commendable… I’ll absolutely be retaining your services shortly.
My question is….. I’ve just registered my car on the 26th of June. Does this mean that the Registration, comprehensive insurance and CTP insurance I’ve just paid cannot be used as deductions for the current financial year?
Hi Mike,
Thanks for the great feedback! To answer your question, to claim GST on those expenses you’d have to be registered for GST on the date of purchase, and then you could claim the GST in your June quarter BAS (note that you may not pay any GST on some of those expenses, so there wouldn’t be GST to claim back). To claim a tax deduction on your 2017 tax return, you must have an ABN, and you must have an ATO-compliant 12 week logbook that started on or before the 30th of June 2017. I hope this answers your question! – Jess
Hi Jess,
I have a full time job paying approx $70K p.a. I plan to buy a new car and drive for uber only. I understand that if I buy from a dealer, I can claim GST on purchase of car.
In terms of loss, if my billings to uber (after GST) exceed $20,000 p.a. and yet I make a loss from my uber activities (after depreciation, fuel and other costs) can I reduce my total taxable income i.e. my salary less the loss from uber and therefore get a tax refund. I plan to buy an expensive car and place it for Uber Select (slightly higher fares charged to customers). The depreciation on the car plus the interest charges on the loan alone will amount to more than $20,000 in the first year.
I would appreciate your thoughts.
Hi Darss, You are correct, if your gross Uber earnings are over $20,000 but you still end up making a loss, then you can claim this loss against your other taxable income. If your gross Uber earnings don’t reach $20,000 then the loss can’t be claimed, and instead you’ll hav to carry it forward so it can be claimed against future Uber profits. – Jess.
Hi Alex
I have a question regarding the deductions for a pre owned vehicle used for Uber.
So I purchased a vehicle for $50K inc GST and used it for 1 year privately before starting Uber i.e. business use was zero before Uber. However I only drove for Uber for 3 months before I realised how little I was making! During the 3 months I kept a log book and estimate my Uber use for that 3 months at 80%.
How do I calculate the opening value for the small business depreciation?
Can I claim any GST on the initial purchase?
Is the depreciation a flat 15 or 30% irrespective of the fact that the business was only in operation for only 3 months of the year?
Cheers Gary
Hi Gary, I can’t give you personal advice here, but generally speaking you cannot claim GST on the purchase of a car unless you were registered for GST on the date you bought it. Regarding depreciation, the small business depreciation rules allow you to claim 15% in the first year of business use (multiplied by your logbook percentage of course). We’d work out the value of the car to be claimed by calculating what it’s written down value would have been had it been depreciation under business rules from the day you bought it. However if the business was closed during the same financial year we’d also have to process a disposal of the car at it’s market value. The small business depreciation rules are quire generous in this case, essentially you’d still get your 15% deduction. Jess
Hi Jess,
I asked a question at another Facebook forum for Uber tax related matters but I’m not 100% convinced on the matter so thought I’d get a 2nd professional opinion from yourself.
So I have been driving for about 5 weeks and am currently recording my log book mileage.
Not sure if you’re aware but the Uber app has a feature (perhaps relatively new) that allows the driver to enter a destination of their choice (2 allowed per day) and the app will only receive ride requests which are in the direction of travel towards the driver-selected destination.
So my question is as follows:
My understanding is that as long as I am logged onto the Uber app then the kilometers we accumulate can be logged as a business expense. Because with Uber’s “2 trips per day towards a destination of your choice” function, I’m able to drive between home and work and only pick up ride requests that are enroute so essentially I’m still using my vehicle 100% for business purposes.
Hi Huntz, it’s a great new feature isn’t it! All of those kms are tax deductible and can be entered in your logbook. It’s true that you may have a secondary motive or benefit in that you’re travelling in the direction of work, as long as you’re logged into the app and genuinely available to take passengers, you are doing so in order to earn income that is taxable (or attempt to earn, if you don’t get any passengers), and therefore you can claim tax deductions for the expenses you incur. Choosing trips that are convenient to you personally does not prevent you from claiming a deduction, just as a professional consultant can pick and choose which clients they work with, their expenses are still deductible and in my opinion so are yours. Jess
Hi Jess,
My husband has a company and the car is registered under the company. Does that means the income and expenses for driving Uber are calculated as part of the company’s income and expenses?
Thanks!
Hi Rachel, I’m sorry I can’t answer this question, as it depends on a number of factors. I recommend chatting to the accountant who looks after your company tax, and they’ll be able to answer with your personal and company circumstances taken into account. Jess
Hi jess, sorry second post I am writing on but I’m just freaking out about all the payments and how little we would be left with if my husband continues driving for Uber so I’ll start with this calculation because that’s what I need help with the most. E.g He makes $2500 before Uber takes out their percentage
Then 2500/11 (Gst)= 227
The 25% Uber fee 2500X0.25= 625
So 2500 – 227- 625 = 1648
Then say $500 expenses (fuel,leasing the car) side note we solely rented the car for Uber
So 1648- 500 = 1148
Not taking the GST credits into consideration because it will only make a $50 difference if that, so then the tax rate and I’m assuming that coz we start @ 2500 that means X 52 = 120000 per year, means the 39% marginal tax + Medicare levy
So 1148 X 0.39= 447
Therefore 1148 – 447 = 701 and for arguments sake we’ll add the $45 in gst credits
701 + 45= 746 net profit. Sorry for the long post I’m just really freaking out he just quit his job to do Uber and 2500 is a lot of money for it to come down to 746 and if this isn’t the right fit then I need to figure it out ASAP. Thank you for your time and patience I really appreciate it.
Hi jess,
My husband started driving for uber on the 31st of March therefore would I be correct in saying that he will have to lodge his BAS for that one day?
Hi Elena, unfortunately that’s right. If you’re registered for GST for even one day of the quarter you must lodge a BAS, even if you didn’t earn anything. If you have no income or expenses for the quarter you can lodge a ‘Nil BAS’ to the ATO in just a few minutes using their automated phone service. The number is 13 72 26, available 24/7. Jess.
Thank you Jess, this is great to know as I had been getting mixed messages from various people.
Hi Jess,
Can I claim a percentage for Home office, for when I track my weekly Uber figures, downloads, viewing Uber related sites eg?
I was told I could not, only my mobile phone usage.
Thank you
Philippa
HI Philippa, you can absolutely claim a percentage of your home internet bills on your BAS’s and tax return. You can also claim any stationery or computer purchases for Uber (or a percentage if they are part Uber and part private use). For the rest of your home office costs the ATO specifies a set rate that you can claim of 45 cents per hour, which is meant to cover your rent, electricity, heating etc. This does not have GST, so it’s not relevant to your BAS< it is only on your end of year tax return. As an example, you drove for Uber for 20 weeks, and spend 2 hours per week working from home on recordkeeping, research etc. Your tax deduction at the end of the year would be 45 cents per hour x 2 hours per week x 20 weeks = $18. I hope this explains it! - Jess
Fantastic, Thank you Jess, it certainly does explain it
Hi Jess,
I have a question regarding claiming expenses for manual car washes that you pay by coin and no receipt is given.
Can I still track this in my logbook and claim in the BAS Expenses?
Many thanks
Philippa
Hi Philippa, in these cases the ATO allow you to keep a ‘diary note’ record. You can just write a note in your diary, a notebook kept in your glovebox or in a ‘notes’ page in your logbook, with the date, amount, and the name of the car wash. This will be accepted as a valid record. – Jess
Hi Jess,
Thanks for providing such useful information.
I did not keep my fuel receipts. Can I use my bank statements to claim GST on my BAS’s?
Regards,
Fara
Hi Fara, the ATO will accept your bank records for transactions under $82.50, but over that amount you must have a tax invoice. Jess
Hi Jess,
How long I can Claim tax deduction for the Car.
1.Brand new car 2017 ($25,000)
2.Second hand car 2012 ($18,000)
My friend said only five years from the car register. Correct?
Can you recommend Should I Brand new or Second Hand, cash or Loan better
Uber is my second job. First job I got $60,000 up. please give me advise..
Thank you so much
Hi,
I can’t answer questions about your personal car purchase or circumstances here, but I can answer your question about depreciation.
There isn’t a specific number of years. Instead, you will claim 15% of the cost in the first year, and 30% every year after that. If the ‘written down value’ gets below $20,000, or if the cost of the car was below $20,000 in the first place, then you can claim/’write off’ the remaining balance.
Jess
Hi Jess,
I have a vehicle worth about 65k which is used for my day job which I claim depreciation on, maintenance and insurance.
Can I claim the same vehicles depreciation, maintenance and insurance on Uber as well?
Hi Wei,
Yes, you can claim your running costs and depreciation for both your employment and your Uber driving. However you must create a new 12 week logbook that records both your employment and Uber kilometres in the one logbook. This will give your logbook percentages for each, so that work % + Uber % + Private % = 100%.
Jess
Hi Michel,
If your total taxable income is below $18k you will not have a tax bill. However you must still lodge a tax return and declare all of your Uber income and expenses, even if you will have no tax to pay.
Thanks, Jess
Hi again Jess;
Just to clarify – looking at Dan’s query above on Feb 20th 12:29 and your reply, is it correct that I can claim depreciation on my vehicle purchased 100% for Uber driving as well as the $15k write-off on my vehicle? If so, how is the depreciation calculated?
Thanks,
Steve
Hi Steve,
The write-off IS depreciation, these two things are one and the same. In other words, the tax concession is allowing you to write off all your depreciation up front, rather than spreading it over a number of years per the usual rules.
I hope that clears it up!
Jess
Thanks for being so prompt Jess! Just to be clear and using very approximate figures:
I anticipate that my gross fares from Uber (before fees) from Oct 2016-June 2017 will be about $40k, however my taxable income after fees and other deductions, but before any write-off will be about $25k. Thus I can further reduce my taxable income from Uber by another $15k i.e. $10k?
And as a result, can I assume that my taxable income for 2016-2017 will be my earnings from my ‘day job’ plus the $10k (which will then be taxed in full at my marginal rate)?
Steve
Hi Steve, that’s spot on! -Jess
Hi Jess,
Regarding the car write off: I bought a second hand car in November on finance purely for 100% uber driving. The purchase price was about approx $15,000 plus GST. Am I correct in saying I can claim the full amount of approx $1,500 GST in my Oct-Dec BAS Statement, but as it will not cover the amount of GST income I received in the quarter it will carry over to the subsequent BAS statements?
And on my end of year tax return, I can offset the $15,000 asset write off against my tax liability for both my main income and my Uber income?
Will I still be able to claim depreciation and interest on the finance at the same time?
Thanks, Steve
Hi Steve,
First, I’ll assume you bought that car from a dealer, hence the GST on the purchase price, and also that you have a logbook showing 100% for your end of year tax return.
Essentially, you have these two a little backwards!
On your BAS, you’re correct that you’ll get a credit of $1,500. If that exceeds your other GST payable, you will actually receive a refund of GST from the ATO. There are no carry-forward rules for BAS, everything is payable or refundable in full each quarter.
For your end of year tax return, yes the $15,000 will be deductible up front against your Uber income. If this deduction is greater than the rest of your taxable profit from Uber, then you’ll end up with a taxable loss from Uber driving. What happens next depends on how much you earned in Gross Fares.
– If your gross fares were over $20k, then you can claim this loss as a deduction against your employment and other taxable income.
– If your gross fares were under $20k, then you cannot claim the loss, instead it must be carried forward to offset against Uber profits in future years.
– (Note the $20k limit in this rule is unrelated to the $20k write-off, it’s just a coincidence that they’re the same amount!)
I hope that all makes sense! – Jess
If we were to register for ABN as a sole trader for driving uber, do we have to register another ABN for leasing the same car to other drivers? Thanks
Hi again Dan! No, you must use the same ABN for both activities, because the ATO only ever issues one ABN per person. It’s important to note that GST registration applies to your whole ABN, not just to a single business activity. This means that since you’ll be required to register your ABN for GST because of the Uber income, you’ll be forced to pay GST on any leasing income too. If you need more detail on this feel free to get in touch or book a consultation. All the best! Jess
Hi Jess, if we are to claim car expenses (i.e. •running costs such as fuel, oil, and servicing•registration•insurance•vehicle depreciation) and we use the logbook method, can we still claim for the $20k writeoff. Say I bought a car for $10,000 and use it 50% for uber, spend $6000 in car expenses(as mentioned above), can I then claim $13,000 as my expense? And if I use it 100% for uber, can I then claim $16,000? Thanks!
Hi Dan, You’re absolutely right and in fact you must have a logbook to claim the $20k writeoff. The writeoff claim is on top of your other car running costs, and both of your examples are spot on. The only catch is that you must exclude GST from your tax deductions wherever GST applies, as it’s assumed you’d claim the GST back on your BAS. – Jess
Hi Jess, I thought the % use applies to the capital cost not the running cost. What Dan has suggested above considers the running cost not the capital cost. Shouldn’t the deduction be $11,000 for 50% use? Thanks
Hi Saffat,
You can only claim a tax deduction for the business use portion of ANY cost, capital or non-capital, because of course the ATO won’t let you claim a deduction for private expenses.
I think Dan’s example is a little ambiguous though, so let me clarify how I have interpreted. He uses the car 50% business and 50% private. The car cost $10k, so of course he can only claim 50% being $5k. His TOTAL (business + private) running expenses for the year were $6k, so he can claim the 50% business portion which is $3k. So 50% business portion of the car purchase + 50% business portion of the running costs = $5k + $3k = $8k.
(Remember you must have a valid logbook, otherwise you cannot claim any of the above and could only claim maximum 5,000km x 66cpkm = $3,300)
I hope this clarifies Saffat! – Jess
Hi
I retired and on Centerlink pension, my wife receive carer allowance because of my health status but I am physical y do such job as driving. I joined Uber and rent a car. Is it anything that I need to be aware? I know that I can have $6500 not taxed by Centerlink as I did not work for few years and if I exceed this limit, I will be taxed if my profit is more than $414 per fornight.
The general question is if I am able to earn anything with such limitations. Centerlink ask for my fornightly earning before tax deduction. I am also asked how many hours my wife does not provide care for me when I drive – I specified amount of hours I drive, not amount that I logged to the device, I think it is proper. She gets about $500 per fornight as a carer. This amount can be reduced when I drive and out of home. Its complex and I don’t know if is a simple answer to my situation
Hi Ted, thanks for getting in touch. This is quite a complex question, and I’m afraid I can’t provide individual advice since I don’t know all of your background details. Also, you mentioned about how much you can earn before being taxed, but I’m wondering whether you’re actually talking about how much you can earn before your pension starts decreasing? In any case, this is something I’d need to look at in more detail for you. I couldn’t comment on the amounts of pension or carer’s allowance you’d receive, as I’m not a specialist on Centrelink (they’re a very separate department to the tax office!). But if you need help estimating how much you would earn so that Centrelink can tell you the impact on your pension, I can certainly help with that. Feel free to book a phone/Skype consultation by visiting our website, you’ll find the Book Now link in the top right hand corner. All the best Ted!
Hi, to benefit from tax deductions is it a must that I have an abn? I don’t have an abn and have been driving for a few days now.
Hi Sakin,
The ATO require you to have an ABN and be registered for GST as soon as you start earning income from Uber. Therefore you must of course have these to claim deductions as well. If you have already started driving you can easily have your ABN and GST backdated to the date you started driving. Feel free to visit our GST Registration page if you need a hand with this.
Gross income ~90k using car for client visits, uber income ~10k
Hypothetically, for tax minimization purposes, if for example I uses multiple cars through the tax year, would the below be correct –
ATO states 66 cents per km, per vehicle up to 5000km, does that mean I can claim on multiple vehicles each with max 5000km claim per vehicle for the tax year? or
If I have owned and used multiple cars in the tax year with the maximum value of $57,581 per car, can I then and depreciated each car via logbook method?
The latter seems more appealing given only having to keep a logbook for 12week per vehicle.
Hi Sam,
The 5,000km limit applies per vehicle. This limit applies across both Uber/business and employment, so if you have already claimed 4,500km for your employment, you can only claim another 500km for Uber. If you had two cars during the financial year, then you can claim up to 10,000km.
When it comes to logbooks, if you trade your car in for a new car you can continue to use the same logbook as long as your pattern of usage hasn’t changed. This means there’s no need to do a new logbook just because you have bought a new car. If you own two cars at the same time, you must have separate logbook records for each car. If your pattern of usage changes for one car, you will need to do new logbooks for both cars.
It’s fine to use the logbook method for one car and the cents per km method for the other, or to use the same method for both cars. Feel free to use whichever combination gives you the highest tax deduction!
Hi Jess,
I currently have my own car which I use for work and claim against. Are there any implications for me to become an Uner partner and use this same car?
Regards,
Grant
Hi Grant, You can absolutely claim deductions for your car for both employment work and Uber driving. However you must use the same tax deduction method for both. This means that if you wish to use the logbook method to claim your Uber car expenses, then you must keep the logbook for your work kilometres also (all in the same logbook is fine, just make sure you note which trips are work and which are Uber). Alternatively you can use the cents per km method for both, but you’ll be limited to 5,000km for the two combined. I hope this answers your question!
Thanks Jess.
Hi jess,
Highly informative article and the comments below. Thank you for writing it.
I was hoping to get your opinion on if it is worthwhile for me to work a second job driving for Uber. I currently have a first job where I make 75k gross(tax withheld on tfn -15k).
I drive an older car so I am looking to buy a newer car worth approx 10k (will mostly go for a car loan) which I will be using for Uber(95%) and plan to keep a log book.
From Uber I was hoping to work the weekends and hopefully make about 25k a year on an abn(need to register for gst).
My expected deductions for Uber costs is approximately 10.5k.
Would you say this can be a worthwhile option to pursue or is it going to be the same overall with the tax I might have to pay at the end of the year.
Please advise.
Thanks in advance,
Regards,
Nirav
Hi Nirav, this is a very personal question, as to whether the money you would make is worth your time. This article on our blog about how much you can make from Uber driving can help you decide whether it’s worth it for you.
All the best! Jess
Hi Jess, very interesting article.
I have a quick question –
Lets say I have non-Uber gross income (post deduction of $90k and I have one old car (#1) for personal use only. If buy car (#2) worth $40k including GST using 40k Secured Car Loan on personal name and start doing Uber in that car (100% Business Usage), can I claim my P&I repayments during tax time? or can I only claim interest? Also, not sure how GST will play in this scenario (as not sure whether the car loan repayments will be charged including GST)
Also, lets say in the year, I did not do Uber for 2 months and the car is sitting in the garage, would I be able to use those 2 month worth of car repayments as deductions under my ABN?
Many thanks
Hi Mark. Regarding your car tax deductions, you can only claim the interest, not the principal, of your repayments. However you can claim depreciation on the purchase cost of your car, which in a way is like claiming the principal. There is no GST on loan repayments, so these amounts aren’t relevant to your BAS’s, only on your end of year tax return. The answer to your second question is yes, provided the car is still available for Uber use, and that is consistent with your logbook then you can continue to claim the expenses. Jess.
if i purchase a car of $22000 and %business use is 10% in year 1 but in year business use increased to 50%. can i claim gst on purchase price in year 2 ? if yes !!! how and how much?
thanks
Hi Nick, no unfortunately you can’t claim more on the purchase of the car later. You can only claim GST on the purchase in the quarter that the transaction occurred, and the percentage is based on your usage at that time. If your usage increases later unfortunately you can’t make an additional claim. Jess
Hi Jess
I have just received a Voluntary Redundancy and currently taking a break. My last day of service was July 14, 2016. As it stands now I have already earnt a massive amount of money for my next years taxable income. I also pay quite a bit in child support whilst I was working. I’m not a shirker kind and would like to work and pay my child support (which I have continually paid since I stopped work).
I am paying $1350/month of child support (which I don’t begrudge) but don’t want to be ripped off either come tax time next year. If I was to work for Uber can I reduce my taxable income with Uber expenses, of the money I have already earned with the redundancy?
Hi Mick, thanks for your question. In most cases, you cannot claim your Uber expenses against your employment income or any other income. Instead, if you have losses from Uber, you can only roll these forward and claim them against Uber profits you make in future year. The exception to this is if your Gross Income (i.e. fares before Uber deduct their fees) total more than $20,000 for the year. In that case, you can claim Uber losses against other income. This will probably require you to drive full time for at least a few months, or part time for the rest of the financial year. I hope this answers your question, but if you need more detail feel free to book a consultation on our website. Thanks Mick! Jess.
Jess,
You have answered this question a couple of times, but this is a variation of the questions already asked.
I plan on travelling to Switzerland to live in the middle of next year.
I plan on selling the car in July next year (The financial year I am not in Australia)
Say I sell the car for 20,000$ but do not earn any money in Australia, then that means I do not have to pay tax on the sale of the car? As my earnings for that year with the ATO will be effectively 0.
Are my assumptions correct?
Thank you so much for your aweseomness
Hi Adam, Interesting question! To give you a brief answer, you would technically still be required to lodge a tax return and pay tax. Your car is a business asset, therefore the sale of the asset is taxable business income. You’re required to lodge a tax return if you earn $1 or more of business income. To complicate things further, depending on your residency status you may not be entitled to the tax free threshold for the whole financial year, which will increase the tax payable. Residency is a very grey area, so I’d definitely recommend getting tax advice for this. Another idea, it may be more strategic not to claim the $20k deduction on your car this year, and instead claim normal depreciation so as to minimise the tax payable on sale… Lots to think about Adam! Feel free to book a consultation via our website if you’d like more detailed and personalised advice. Happy travels!
Hi Jess my husband only just started uber so last years earnings of $900 need a tax return. Should he be putting this under personal services income. He was going to put it as a business but the only option it gives him on etax is for earning over 20,000 none of the options apply to him
Thanks for your help
Hi Andrea, no it’s not Personal Services Income, it definitely must go in the Business Schedule. If he has made a loss he will not be able to claim it against his other income because he has earned less than $20k, so the loss must be deferred instead. Aside from this I’m sorry I can’t guide you further – as tax agents we have specialised software and therefore I’ve never used eTax! Good luck!
Hi,
i purchased a car valued at 27k, the car is used 80% for uber, am i able to put that amount in my BAS form or am i only allowed to claim at 20K or under.
Hi Jimmy,
Yes you can absolutely claim 80% of the GST, provided you were registered for GST at the time you bought it and you purchased fro a GST-registered seller (i.e. a dealer, not a private seller). Be sure to put the purchase price at G10 on your BAS, and only claim the amount of GST on the invoice x 80% at 1B. The 20k limit that you’re referring to only applies to your tax deduction on your end of year tax return, not GST on your BAS. Since the price is over $20k you can still make the claim, but you must spread the claim over a number of years as depreciation, instead of claiming up front for cars under $20k.
Hi Jess,
I bought a car in Dec 2015 and as per the logbook about 90% is business use. The car costed $12500 ex GST. Till June 30th I have made about $10500 from Uber. I want to check is there a way write that car off. As per your comments above it looks like we cant as it will be a loss for uber income and has to go next year. Does that mean that it can be written off next year or how will it work. Thanks
Hi Ashish,
Thanks for your question. So if we assume your net profit from Uber was $10,500 (after deducting all your expenses) and the cost of your car after applying your logbook percentage was $12,500, then you’d have a carried forward loss of $2,000. This will be carried forward to be offset against future year’s profits. So, let’s say next year you make a net taxable profit of $5,000, then the $2,000 from last year will be deducted and you’ll only pay tax on $3,000. Or alternatively, say you only made a profit of $500, then we would use $500 of your carried forward loss to cancel out this taxable profit, and the remaining $1,500 would be carried forward again to next year.
Losses can be carried forward indefinitely, but can only be offset against the ‘same business activity’. Therefore, if you stop driving for Uber, your carried forward losses can no longer be applied.
I hope this answers your question.
Hi Jess, Its all really valuable advice.
Would you please comment on my situation.
I already had purchased a vehicle for 32,000$ in 2011 and started driving with Uber in 2015. Can I deduct portion of purchase amount as work related expenses under that 20,000$ tax exemption. Or Can I transfer my own vehicle to the sole business ?
How should i account for deprecation expenses with my vehicle ?
Thanks
Hi Mad, that’s a complex question. The simple answer is that we can calculate the approximate written down value at the time you started driving for Uber and bring this into account. I estimate this to be roughly $6,500. Under the $20k deprecation rules you would then be able to write this off as a deduction. Don’t forget that if this results in you making an overall loss for Uber, you can’t claim that loss against your other taxable income. Instead you would need to carry this loss forward to be offset against future Uber profits. If you need a more detailed response, please feel free to book a consultation on our website. Jess.
Hi Jess,
I was thinking about the 20% fee that uber takes from the full fare received from customers. Does this mean that I should be declaring the full fare amount received. Likewise, should I be claiming the 20% fee as expense for using the UBER platform?
Kind regards,
-Stan.
Hi Stan, You’ve got that all correct. In both your BAS and your end of year tax return, the ATO require you to declare the Gross Fares as income, and then the Uber Fees as an expenses. These two net off to give your net fares. It’s the same end result either way, the ATO just want to see it broken down. Note that there is no GST to claim in Uber fees because they’re not an Australian company. Thanks Stan!
Hi Jess
Looking at this website and your comments made me just to stick with one regular job. One quick question, i just signed up with uber and drove for only one week. I am not going to drive for uber any more. Do i have to register for gst and claim the tax or i can claim from my regular tfn?
Hi Kart,
Unfortunately you are technically required to register for GST for that one week and then de-register. You would need to then lodge a BAS for the quarter, declare the little bit of income you earned and pay GST to the ATO. The remainder of your Uber income (the GST exclusive amount) must then be declared as business income on your end of year tax return. Frustrating, I know!
Hi Jess,
Thanks for this article.
A quick question, if I paid $10 000 to purchase a second hand and use that 100% to drive uber is that $10 000 tax deductible?
What happen if I sold my car for $9 000 next year, is that whole $9 000 a taxable income?
Thank you.
Hi Gordon,
Thanks for your question. You’re absolutely correct, you must pay income tax on the market value upon sale. The same is true for GST. You can claim GST on your Uber percentage of the purchase price, but you must pay GST on the sale price of the car. Importantly, these rules also apply when you stop using the car for a taxable purpose, that is, when you stop driving for Uber. When you deregister for GST you must pay GST on the car’s market value at the time, and also pay income tax on a ‘balancing adjustment’ for the market value of the car. Many accountants forget to apply this, so it’s important you’re aware of it.
Hi Jess,
Great article, thank you for all the information!
A quick question, I have an ABN and have registered for GST. I purchased a vehicle today (private used car). Should I register this for private or business use?
I will use my car very rarely for private use, mainly just for Uber. Am I right in thinking the insurance etc will be deductible? I intend on keeping a logbook.
I have a full time job and this will be something on the side for me.
I just want to set everything up so that I do not have any issues at tax time! It is all very new to me.
Thanks!
Lizzy
Hi Lizzy,
The laws registering cars are different from state to state, so you’ll need to check with the road authority where you are. In terms of insurance, you should definitely advise that you’re driving for Uber, otherwise you may not be covered if something happens while you’re driving. If your insurance company don’t allow you to drive for Uber, you can just switch to a company that does cover it, there are plenty out there. In order to claim the cost of your registration, insurance and other running costs, be sure to start your logbook before 30 June and keep it for 12 weeks! All the best with your Uber driving Lizzy.
Hi, I am wanting to know if I can setup a company to operate Uber through so the income doesn’t get added to my personal income from my regular job. Has anyone done this? And what problems might there be?
Thanks
Hi Nathan,
Great question. You can drive for Uber in a company, but the problem is cost. Company setup costs will be $600 to DIY or $800-$1,000 with the help of an accountant. Then each year the company must have Financial Statements and a Tax Return prepared, plus pay an annual fee to ASIC, assume around $2,000 per year all up. There are also more stringent bookkeeping and administration requirements than for a sole trader.
If you’re in the 32% (+ Medicare Levy) tax bracket ($37-$80k) from your employment and other income (i.e. before your Uber income), and we compare to the current 28.5% small business company tax rate, you would need to have Uber profits (after expenses) of over $46,000 per year to cover the annual costs plus setup costs. (I’m yet to meet an Uber driver who has reached this!)
If you’re in the 37% (+ Medicare Levy) tax bracket ($80k-$180k) from your employment and other income, and we compare to the current 28.5% small business company tax rate, you would need to have Uber profits of over $27,000 per year, not including setup plus costs.
Of course these tax rates may change depending on the outcome of the Budget and Election, but there won’t be much difference to these results.
My recommendation is that setting up a company for Uber is overkill, unless you’re earning over $180k, or earning over $80k from employment PLUS driving for Uber almost full time, and you plan to do so for a number of years… In other words, it’s generally not worth it!
I hope this answers your questions Nathan. Jess.
Hi Jess,
I’ve been considering setting up a company to operate Uber under and doing research on information of it somehow led me to your comment here.
Given that I’m in the 37% marginal tax rate, whereas the small business tax rate in FY17/18 is 27.5%, and I would probably generate over $30k net profit in this financial year, it seems to make sense to set up a company rather than operating as a sole trader. However, I’m not 100% clear about the extra costs for registration and reporting obligations.
So, what extras as opposed to a sole trader are required for a company on the top of the usual quarterly BAS’s and the annual income tax return?
Also, can you please elaborate on the more stringent bookkeeping and administration requirements that you mentioned above?
Thank you very much in advance Jess
Hi Sean,
This question is quite involved and depends on a range of personal circumstances, so I’m afraid I can’t answer here as to whether this is a good option for you.
However to answer your question about cost, you should expect to pay around $800 to set up a company (including legal documents, ASIC’s registration fee of $459, and accounting fees to register the company TFN, ABN, GST etc), $250-ish in annual fees to ASIC, $20-$50/mth for bookkeeping software (because all companies must have fully reconciled bookkeeping records), and $800-$1200 for end of financial year Financial Statements and Tax Return (because all companies must have formal financial statements prepared).
If you’d like more personalised advice, please feel free to book a consultation.
– Jess
Hi Jess
How about if someone is planning to drive for Uber/Ola/Didi etc platforms for full time and then setup a company and employ yourself as a driver under the company?
1. My question is: Will it be beneficial for the tax purpose?
2. Will the company be liable to pay me the mimimum wage guarantee?
3. I am also wanting to keep my current superannuation as I have income protection and TPD through that, and they will only let me keep it if the super is coming through the employer deductions and I am assuming Uber income received in the bank is pre-tax income.
Regards
Hi Raj, I strongly advise against setting up a company for Uber. A company costs $600-$1000 to set up, $263 in ASIC fees per year and $1,000+ per year in accountants fees. And depending on your other taxable income it may even cost you more in tax than just being a sole trader. It is not worth the effort or cost. I am surprised to hear that your super fund would discontinue your insurance, my understanding was that if you tell them to continue they must continue, even if you are not making contributions. I don’t specialise in super though, so I can’t be sure. I suggest chatting to them further to check. – Jess
Hey Jess,
great site – thank you.
if i was to purchase multiple cars, each worth less than 20k, then create a business leasing these to prospective drivers would the deduction apply each time?
Hi there,
Yes, you can certainly claim this tax concession as many times as you like. The only requirement is that your business turnover is below $2 million. The tax concession is currently scheduled to close on the 30th of June 2017.
Keep in mind though that depending on which business structure you use, and your level of profits, you may not be able to use all of those tax deductions in the one financial year, and in some cases they will instead be rolled forward to be offset against future profits.
If you need any further advice on setting up this business or how the loss rules work feel free to get in touch.
Jess
Hi Jess,
I just want to ask you the calculation for tax if I am working Uber as my additional income. For instance, I am working full time earning per year $85,000 and from Uber I am earning $20,000 per year. Let say for 1 year all expenses for Uber $6000. Then how the tax will be calculated? I understand my tax bracket under 37% category for my TFN, does the calculation for my tax (TFN and ABN) will be counted separately for my ABN and TFN or it will be combined?
If it is combined, it means my tax fall in the high bracket unfortunately :(
Is there any way to reduce the tax legally as I don’t wanna end up paying more tax at the end.
Thank you so much,
Hani
Hi Hani,
Your ABN profit from Uber is added to the rest of your taxable income and is taxed at your marginal tax rate. Therefore, if you already have $85k of taxable income from employment, then your Uber profit will be added on top and taxed at 37% (plus Medicare Levy). It’s up to you to decide whether this will make Uber driving worthwhile for you. The only way to reduce your tax is by keeping good records of all your expenses so that you can maximise your tax deductions. Be sure to keep a logbook as well to maximise your car claims.
I hope this is helpful!
Jess
Hi Jess,
“For tax purposes, you can also claim the kilometres between rides, kilometres from home to your first fare, and kilometres from your last fare back home.”
What if you leave home and drive somewhere, however cannot find any passengers, so just drive back home or wherever. Is that a claimable expense?
Thanks,
Huntz
Hi Huntz,
Yes that travel is tax deductible too, provided of course that it was genuine. Logging into the Uber app is the clearest way to verify that you truly were ‘working’.
Jess
Hi Jess,
Could you clarify something for me please? If I log on to Uber waiting for my first passenger, and I accept a duty, and they are 5 kms away waiting to be picked up, can I record those 5 kms as part of my trip to go and get them? What about driving home after my last passenger, if they are say 20 kms away from my own home? Can that be counted too?
Hi Angela,
Yes, you can absolutely claim ALL of your Uber related travel, including kilometres between jobs, and kilometres to and from home at the start and end of each Uber session. The distance isn’t a problem, for example if you live some distance from your nearest city and have to travel in to the city where there’s a higher demand for Uber.
Note that when Uber advise your kilometres on your weekly and quarterly summaries these are only kilometres that you carried passengers. Be sure to keep your own records to determine your total Uber kilometres for tax purposes.
Hi
I was told I cant use my car for Uber as I am doing novated lease via my employer. Is this correct?
Hi Hahim,
Thanks for your question. I’m not sure whether you mean that your employer/lease company said you are not allowed to, or whether you mean this came from Uber or the ATO.
I can’t comment as what is permissible use of your vehicle, as this will be written into the terms and conditions of your lease contract. They may have a clause in the lease that says you cannot use the car for business purposes except for your employer? You would need to ask your employer or lease company about this.
I also can’t comment on whether Uber allows this. Technically the lease company owns the car, not you, so you’d have to check Uber’s requirements on ownership of the vehicle you use.
As far as the ATO is concerned, they don’t stipulate whether you may or may not use a leased car for Uber, but they do have rules on whether you can claim a deduction for the expenses. If you are salary packaging your vehicle, then you are already receiving a tax benefit, because you’re paying for the car from your pre-tax income. To claim a tax deduction on anything that has already been salary packaged would be double-dipping. If you pay for running costs directly (i.e. outside of the package/lease agreement) then these may be deductible provided you keep a logbook.
As a side note, for a lease that isn’t salary packaged, you may claim the lease payments on your end of year tax provided you’ve kept a logbook, and you may claim the GST on the lease payments on your quarterly BAS’s. Note that when a car is leased, you don’t actually own the car, so no interest or depreciation (including the $20,000 upfront depreciation) is deductible. Instead you’ll only claim the lease costs.
I hope this is helpful. – Jess
Hi Jess,
Thanks for such a useful article. Is it possible to claim both method (per cents km and logbook) as I haven’t kept my logbook yet and now on I want to keep it. I am a uber driver since last week of December. Should I give my ABN number to uber?
Thanks
Mukti
Hi Mukti,
For your quarterly BAS’s you don’t need to have a logbook. Instead you can either claim a percentage of your car expenses set by the ATO based on your estimated kilometres travelled for Uber, or make a reasonable estimate of the percentage you use your car for Uber, based on Uber reports, service records and other information. You can then claim this percentage of the GST back on all your vehicle expenses. We’ll walk you through these options when you lodge your BAS with us. Once your logbook is complete you can switch to using your logbook percentage instead. Be sure to keep all your car running expenses (both Uber and private) so that your claim can be calculated.
For your end of year tax return you do have to have a logbook, but you still have plenty of time! As long as you start the logbook before 30 June, you can use it for that year’s tax return. (Although if you do start in June, you’ll have to wait until your 12 week logbook is complete before you can lodge your tax return). If you don’t start a logbook during the financial year, that’s when you’ll be forced to rely on the cents per km method. (Note that the cents per km method does not apply to GST/BAS’s, it is only for your end of year income tax).
Regarding your ABN, I’m not sure what Uber’s requirements are regarding advising your ABN. This is a question for them I’m afraid!
All the best with your driving,
Jess
Hi Jess,thanks for the helpful tips. Would you mind explaining the tax implications for an individual with a full time job having a new car purchased through a novated lease to drive uber 20%of the time? I intend to utilize the $20,000 business expense write off but the car on the novated lease costs $30,000 (including gst).
Hi Kevin,
That’s quite a specific question, and one that required more information about your personal circumstances to answer. I would invite you to book a consultation on our website, where we can do a calculation based on your income, marginal tax rates, other tax factors, your projected uber income and the specifics of the lease.
A few quick notes through, the $20,000 doesn’t apply if the cost of the asset is over $20,000. Also, with many kinds of leases, you do not actually own the car, so you cannot claim the $20,000 deduction even if the car price is below $20k. Depreciation only apples where you are the owner of the car, not the leasing company. Please get in touch if you’d like further details.
Jess
Hello Jess
Under new tax incentive where businesses are allowed to write off expenses up to $20000, would I be able to write off a purchase of a car as an expense ? Since I will be using it 97% of time for Uber driving.
Appreciate your help.
Thanks
Hi there,
The simple answer is yes, but there are a number of qualifications to that.
Essentially, if you buy a vehicle (new or second hand) with a total GST-exclusive price under $20,000, you can claim a deduction for the Uber use percentage of the purchase price on your end of year tax return.
Here’s an example:
You buy a car for $19,800, and you will use that car 60% for Uber. The GST on the car is $1,800, and you will get 60% of that back on your BAS, being $1,080. Then the GST exclusive amount, being $18,000 will be entered in your end of year tax return, and you can claim 60% of that as an up front deduction. That equals a tax deduction of $10,800.
There’s a catch here. If your Uber taxable profit is more than the amount of the deduction, then you won’t get the benefit of the whole this year. Say for example your net Uber profit was $5,000 (i.e. you fares, less Uber fees, less car running costs and other expenses), and then you claimed the depreciation deduction of $10,800, this would create a net loss of $5,800. Unless your gross fares for the year were more than $20,000 this loss cannot be used or claimed in the current year. Instead it will be carried forward to be claimed against your Uber profits in future years. For drivers who are not driving much, the $20k write-off may not have as much impact as you may first think.
There’s also a sting in the tail you need to keep in mind. When you sell the car, the sale proceeds are taxable. Since you will have claimed depreciation on the whole cost of the car at purchase, you must therefore pay tax on the whole selling price of the car. What goes around comes around! If you’re replacing the car with another business vehicle, and if this $20,000 deduction rule is still in place (which is by no means guaranteed), then the deduction on the new car should offset the tax paid on the sale of this car. However if you’re selling it and not replacing it, or you’re simply no longer driving for Uber, there will be tax to pay.
If the purchase price of your vehicle is over $20,000, you can only claim depreciation at normal small business rates, being 15% in the first year and 30% in subsequent years.
I hope this information is useful!
Thanks for providing this service. Nothing about signing up for Uber has been as straightforward as their slick marketing made it seem. This site seems to provide some solid, practical advice. I’m sure I’ll be signing up for some of your services in the near future.
Thanks for your comment Duncan. Becoming a sole trader can be quite a learning curve, I hope you find the info here useful! All the best with your driving.
Q1: Why is the gross fare deductible rather than the net fare? Given drivers don’t actually receive the gross fare, if it was the gross fare would we not recieve the gross fare then pay uber back the fee?
Q2: I drive a dual cab ute and have purchased a canopy for it (stop luggage getting wet), sidesteps (so people can get into the car) & a tub liner (to protect the car from scratching) as well as a Long Range Fuel Tank (so I can purchase fuel at its cheapest once a week rather than most expensive). All this is deductible under the 20k AUTO deduction. Is it not?
Hi Alex,
1) You will only pay tax on the net amount. However the ATO require you to report the gross fares as income, and then claim the Uber fees as a deduction. It’s the same net result, just a more round-about way of reporting it.
2) Yes, all assets purchased after the 12th of May that are under $20,000 can be deducted up front. A few things to note:
– you can only claim a percentage based on how much you use your vehicle for Uber vs Private use
– it’s not ‘cash back’, only a tax deduction
– if the deduction pushes your Uber business into a loss, that loss can’t be claimed against your other income. Instead it will be carried forward and can be claimed against Uber profits in future years. This means you may not get the full benefit of the deduction in the current year, depending on how much you drive and how much profit you make.
– if you sell the assets or the car as a whole you will need to pay tax on the proceeds of sale, because you claimed a deduction on the purchase. The tax rules work both ways!
I hope this answers your question!
Jess
Hi Jess,
Is the 20% fee that Uber takes from gross fares tax deductible, considering drivers pay GST on gross fares rather than their 80% cut?
Thanks!
Thanks for your question Doug. The Uber fee is absolutely deductible. You’ll declare the gross fare (exclusive of GST) as income, and claim the 20% fee as a deduction, thus only pay tax on your 80% cut. GST is different though. There is no GST on the Uber fee because they are not an Australian company. This means you’ll pay GST on your gross income without any reduction for the Uber fee. Note that you’ll only pay income tax on the GST exclusive amount for your gross fares, i.e. the income you have left after giving the ATO their GST portion. I hope this helps! Jess
Hi Jess,
Considering that Uber drivers have to get an ABN are these drivers eligible for the Abbott/Hockey 20000 immediate tax deduction in their new budget? For instance if a car was purchased this would surely be considered “relative to the business”?
Hi Jared, You’re absolutely right, as small business owners Uber can claim the $20,000 up front deduction, and also claim the GST back on the purchase of a new vehicle. Beware though, if you later sell the car, you will then have to declare the proceeds as taxable income. You will also have to pay GST when you sell it, or pay a GST adjustment if you deregister from GST in the future. It’s important to plan ahead for these. Finally, don’t forget that all of your tax deductions and GST claims need to be apportioned for business and private use percentage, so you’ll need to have a logbook. I hope this helps!
Thanks heaps for writing this article! Have been quite confused recently and this at least has given me some direction on what to do next!
Thanks for the feedback Victor. It’s tricky to get direct information so I hope this helps! Feel free to reach out on our Contact page if you need anything further.