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FREE ABN & GST Registration (if you need it!)
If you’re thinking of driving for a food delivery company like UberEats tax is probably one of your biggest uncertainties. Do UberEats drivers need an ABN? What about GST for UberEats? Is a logbook required? And what about tax deductions for UberEats drivers?
I’ve written this blog post to be your complete guide to tax for UberEats and Food Delivery Drivers. It will explain how to register with the ATO as a food delivery driver, and what tax deductions you can claim against your UberEats and food delivery income.
Looking for information on tax for Amazon Flex drivers? This article focuses on tax for food delivery drivers, but everything in this article applies equally to Amazon Flex drivers too.
Do UberEats & Delivery Drivers Need An ABN?
Yes, all UberEats, food delivery drivers and Amazon Flex must have an ABN. ABN stands for Australian Business Number, and all sole traders, businesses and companies in Australia must have one. All businesses have a Tax File Number also, but TFN’s are private and confidential, so an ABN serves as the public identification number of a business.
So if you drive for UberEats, DoorDash, MenuLog, Amazon Flex or another delivery service, you must get an ABN from the Australian Taxation Office. If you don’t have an UberEats ABN number yet, apply for yours FREE with DriveTax. Our free Uber Tax Info Pack includes your UberEats ABN application lodged to the ATO for you, plus a free 5-day email course to explain the essentials AND a free Uber bookkeeping spreadsheet. If you’ve been driving for a while that’s okay, we can backdate your application for you as well. Register in just a few minutes here.
Do UberEats & Delivery Drivers Have To Register For GST?
If You ONLY Do Delivery – GST Not Required
If you’re a food delivery driver you must have an ABN, but you do not have to register for GST.
You may have heard that Uber drivers must register for GST, but that tax law only applies to people who drive passengers, not food. As a delivery driver, normal tax rules apply, and you only need to register for GST if you earn more than $75,000 per year, which most drivers won’t. So generally speaking, GST registration for UberEats is not required.
If you are not registered for GST then you do not have to lodge a BAS. BAS’s are only for people who are GST-registered, so it does not apply to UberEats or delivery drivers (unless you also do rideshare).
You will need to declare your food delivery income and pay income tax on your end of year tax return. So keeping records of your expenses to reduce your tax bill is important. More on this below.
If You Do Delivery AND Rideshare – GST Required
This is where things get confusing.
If you drive for UberEats AND UberX, or do any other ridesharing AND food delivery driving, then you must register for GST because of your ridesharing. This is because all rideshare drivers must register for GST from the first dollar they earn.
Here’s the catch: your GST registration applies to ALL your business activities, not just the rideshare driving. This means you’ll be paying GST on your delivery income AS WELL AS your ridesharing income. Of course, to offset this you can claim back the GST on your delivery expenses to reduce your GST bill, but you’re still likely to be paying a portion of your delivery earnings to the ATO in GST. This is an unfortunate side-effect of doing both types of driving at once.
How Do I Manage My Taxes for UberEats?
Keep a Logbook Of Your UberEats Driving
If you use your car for deliveries, you MUST have a valid ATO logbook if you want to claim your fuel and other car expenses. The logbook is required by the ATO as evidence of the percentage of car expenses you can claim.
Without a logbook, you’ll be restricted to the ‘cents per kilometre method’ to claim your car deductions. This method allows you to claim a maximum of 5,000km at a set rate, so your total deduction is quite limited. Here are the rates:
2021-2022: the rate is 72 cents per km, so your maximum claim is 5,000km x 72c = $3,600
2022-2023: the rate is 78 cents per km, so your maximum claim is 5,000km x 78c = $3,900
2023-2024: the rate is 85 cents per km, so your maximum claim is 5,000km x 85c = $4,250
If you only drive a little, then this might be fine for you, and it’s much easier to use the cents per km method rather than keeping a logbook and keeping all your fuel receipts. But if you drive a lot, this could be much less than your actual expenses, and result in a bigger tax bill.
Here are the essentials of keeping a logbook:
It must go for 12 weeks. It’s okay if the 12 weeks go past the 30th of June (e.g. you keep your logbook from May-July). But you must start before the 30th of June for it to count for the current year.
You only need to make one logbook entry for each shift/session of driving, you don’t need to record individual deliveries. You also don’t need to record private/non-business trips.
You must record the date, and the odometer reading of your car at the start and end of each shift/session of driving.
You should start your logbook when you leave home or switch on your delivery app, and stop when you arrive back home or switch off the app. Your kms to and from home, and your kms in between deliveries can all be included.
Our Free Uber Spreadsheet also includes an ATO-compliant Logbook Spreadsheet which does all the adding up for you and calculates your UberEats logbook percentage. It also includes an expense tracker spreadsheet to help you maximise your UberEats tax deductions.
If you prefer a physical paper logbook we recommend the Zions Pocket Logbook, which you can buy from Officeworks for under $7. Using an app is also fine, as long as you are still recording your odometer readings at the start and end of every trip.
If you use a motorcycle, bicycle, eBike or scooter for deliveries, you don’t need to keep a logbook. You just need to estimate what percentage you use your bike for business purposes using any ‘reasonable method’. We still recommend keeping some kind of log for at least a few weeks to show the ATO how you worked out your estimated percentage. Note that the cents per km method cannot be used for bikes.
Keep Records of your Uber Expenses
You’ll also need to keep records of your UberEats expenses, so that you can claim these back on your end of year tax return. That can be in a spreadsheet, such as the DriveTax Uber Spreadsheet, or just a collection of receipts.
The ATO will accept bank statement records if you don’t have receipts, however if you’re registered from GST you must have a tax invoice for expenses over $82.50 in order to claim for GST. For expenses where you don’t receive a receipt, such as car washes, you can make a note of the date and amount of the expense yourself, keep a notebook in your glovebox for this. For expenses that come electronically, like your mobile phone bill, save them in a dedicated tax folder in your inbox or on your computer.
If you make a profit from your driving, you will need to pay income tax on that profit, so it’s a good idea to put aside some of your earnings in a separate bank account to save for your tax bill. This is different to what you may be used to where your employer tax out tax for you. As a sole trader you must manage your tax obligations, calculate your business income and save for your tax bill yourself.
The amount you need to save will depend on a variety of factors, such as your marginal tax rate, whether you’re driving full-time or part-time, your other sources of income, and your car and running costs, so everyone’s tax bill will be different. But as a very rough rule of thumb, put aside 10-15% if driving is your only source of income, or 20-25% if it is your second job.
Declare Your UberEats Income and Expenses on your Tax Return
At tax time, on your end of financial year tax income return you’ll fill your UberEats and food delivery income and all related expenses into the Business Schedule. This is part of your normal tax return, it is not a separate lodgment. If you made a profit, it becomes part of your taxable income, and you’ll pay tax on this at your marginal tax rate. Check out our Ultimate Guide to Tax for Uber Drivers to learn more.
If you’d like help lodging your tax return, the DriveTax Express Tax service is designed especially for food delivery and rideshare drivers. By having a registered tax agent and Uber tax expert prepare your tax return you can make sure that every tax deduction is minimised and you get the best possible Uber tax refund. Visit our Tax Returns page to learn more.
If you need help lodging your tax return, visit our Tax Returns page.
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.