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Uber GST – The Complete Guide to GST for Uber Drivers

DriveTax Free Uber GST Registration
DriveTax Free Uber GST Registration

Uber Tax Returns Ultimate Guide

Uber GST is one of the biggest learning curves for new rideshare drivers. Thanks to specific ATO GST laws for Uber drivers, we have to register for GST, lodge BAS’s, and pay additional taxes to the ATO, things that most Australian small businesses don’t have to worry about.

So my goal in this blog post is to make Uber GST as simple and stress-free as I can. I’ll explain the rules on whether you have to register for GST as an Uber driver, how GST on your rideshare income is calculated, and how to lodge your Uber BAS to the ATO.

 

Table of Contents

1)  Introduction to GST for Uber Drivers
1.1)  What Is GST?
1.2)  Do Uber Drivers Have To Register for GST?
1.3)  Why Do Uber Drivers Have To Register for GST?
1.4)  How To Register for GST for Uber
1.5)  Choosing your GST Registration Date

2) Calculating GST On Uber Income & Expenses
2.1)  GST On Uber Fares & Fees
2.2)  GST On Uber Expenses
2.3)  Saving For Your GST Bill

3) BAS’s for Uber Drivers
3.1)  What Is A BAS?
3.1)  How Do You Lodge A BAS?

 

Skip To The Good Bits!

Looking for an accountant to lodge your BAS?
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Want to learn how to lodge your own Uber BAS on MyGov?
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Introduction to GST for Uber Drivers

First, let me explain exactly what GST is, and how it applies to Uber Drivers.

What Is GST?

GST stands for Goods and Services Tax. It’s a tax of 10% on all the goods and services sold in Australia. GST is everywhere.

We pay GST on our groceries, clothes, phone bills, haircuts and Netflix subscriptions. If you look at your tax invoice for almost any purchase you make you will see the GST. But as regular consumers we don’t really pay attention to GST, all that matters to us is the total price.

As GST-registered business owners, however, suddenly GST becomes very important. All GST-registered businesses in Australia must pay 1/11th of their business income to the ATO as GST. For Uber drivers, this means 1/11th of the Gross Fares, Split Fare Fees, Booking Fees, Tips, and all other amounts that you receive from each passenger.

You can then claim back GST credits for any GST you pay as part of your business related expenses. This includes the GST Uber charges you on their Service Fees, plus the GST on all the other parts of the fare you pass on to Uber, such as Split Fare Fees and Booking Fees. It also includes the GST on other Uber expenses such as fuel, mints, stationery, and your mobile phone bill (although some of these need to be apportioned for your Uber vs private use percentage).

GST-registered business pay their GST to the ATO quarterly on a Business Activity Statement, which is like a mini-tax return but just for GST. I’ll explain this in a little more details below.

Do Uber Drivers Have to Register For GST?

Yes, all Uber and Rideshare drivers must register for GST right from when they start driving for Uber

  • Uber & Rideshare Drivers: ALL rideshare drivers must register for GST, because the ATO has special tax laws for taxi and rideshare drivers. The usual GST Registration threshold of $75,000 threshold does not apply, instead we must register for GST from the first dollar we earn.
  • UberEats & Food Delivery Drivers: The ATO’s special rules only apply to ridesharing services, not food delivery. So if you only do food delivery, and you don’t do any rideshare driving, then you do not have to register for GST. The only exception to this rule is if your total ABN income, including any subcontracting or business income and of course food delivery, is more than $75,000. Assuming you’re under this threshold, the rest of this post doesn’t really apply to you, so to learn more about your ATO registration and tax rules head over to Tax for UberEats & Food Delivery Drivers.
  • Rideshare AND Food Delivery Drivers: If you do both rideshare AND food delivery. then the rideshare rules apply. You must register for GST, and you must pay GST to the ATO on both your rideshare and your food delivery income.

Once you register for GST, that GST registration applies to ALL income you earn on your ABN. So, as mentioned before, if you drive for both Uber and UberEats, you will have to pay GST on both. Likewise, if you do freelance or subcontracting work or have other small business income on your ABN, that income will now be subject to GST as well.

> Register for GST for free with the DriveTax Free Uber Tax Info Pack.

A Quick History Lesson: Why Do Uber Drivers Have To Pay GST?

The ATO’s law forcing taxi drivers to register for GST has been around for decades. This rule was introduced because the government sets fixed taxi fares across Australia. This created an uneven playing field between big taxi companies earning more than $75,000 who had to pay GST on their income, versus the one-man owner-drivers who were under the $75,000 threshold and didn’t have to pay GST. So the government solved this unfair advantage by forcing all taxi drivers to register for GST no matter how much they earned.

Uber launched in Australia in 2012 and at first the ATO didn’t know what to do. At that time Uber was running through a foreign company, in some states Uber was illegal (although illegal income is still taxable!), and of course taxi drivers were angry and protesting against their new competition. But the biggest question for the ATO was whether rideshare income was taxable, and whether rideshare drivers were subject to the same rules as taxi drivers when it came to registering for GST. All of this made things very confusing for Uber drivers who were just trying to do the right thing.

In May 2015 the ATO announced they had analysed the tax law and found that an Uber was a taxi under the definition in our tax law, and therefore Uber drivers had to register for, and pay, GST. Uber appealed, and the final court battle happened in February 2017. During the appeal, the ATO’s legal team read out definitions of a taxi out of SIX different dictionaries. The dictionaries all stated that a taxi service is any service that drives passengers from A to B for money.  The court concluded that while a yellow car with ‘TAXI’ on the side and a light on top is certainly a common form of taxi, it’s not the only possible kind that fits the definition. They found that Uber, and by extension all rideshare services, meet the dictionary definition too.

Fast forward to today, and the ATO’s rules on rideshare and GST are crystal clear and strictly enforced. The ATO make Uber send them the details of all Uber drivers, and anyone who isn’t registered for GST will receive a letter forcing them to comply with the tax rules.

How To Register for GST for Uber

Getting your Uber GST Registration is easy, and free. You can submit your own application on the ATO website, or you can use our FREE DriveTax ATO Registration service, which is part of our free Uber Tax Info Pack. It takes only a few minutes to fill your contact details and preferred start date into our online form, and then we’ll prepare and submit your ATO application within two business days.

Note that is it possible to register for GST monthly, but I don’t recommend it. If you’re planning to lodge your BAS’s through an accountant, lodging 12 BAS’s per year instead of 4 will triple your accounting fees. Or if you plan to lodge your own BAS’s, lodging monthly is three times as much work. Some Australian businesses also have to option to register annually, but this is not available for taxi or rideshare drivers.

To register for GST, you also need an ABN. An ABN is an Australian Business Number, and every Uber, rideshare and food delivery driver must have one. You only get one ABN for your lifetime and you must use that same ABN for all your business activities. So if you already have an ABN you must use that ABN for Uber too, or if you’ve had an ABN in the past that is now cancelled you must reactivate it.

If you’ve never had an ABN before we’ll get one for you at the same time we register you for GST. Or if you’ve had one before just fill it into our GST Registration form and we’ll add your GST registration to your existing ABN. Check out this post on our blog for more about ABN’s for Uber and UberEats

> Register for an ABN and GST for free with the DriveTax ATO Registration service, part of our Free Uber Tax Info Pack.

Free Uber Tax Info Pack
Free Uber Tax Info Pack

Choosing your GST Registration Date

You can only register for GST once you have started the application process for Uber or another rideshare company. If possible you should do this before you start spending money on startup costs such as vehicle checks, permits and other fees so that you can claim back any GST you paid on these expenses. The same is true if you plan to buy a car for Uber. By starting the Uber application process and registering for GST before you buy the car, you may be able to claim back the GST on buying your car for Uber.

 

Calculating GST On Uber Income & Expenses

The ATO calculation of GST on Uber fares and GST on Uber fees can be confusing. Instead of simplifying things and just asking rideshare drivers to pay GST on their net profits, the ATO want us to calculate things the long way around. But do rest assured, you will only pay GST (and income tax) on the profits that go into your pocket, and not on Uber’s money! Let me show you how it works.

GST On Uber Fares & Fees

Any business in Australia that is GST-registered must give 1/11th of their sales to the ATO as GST. As an Uber or rideshare driver, this means that 1/11th of the Gross Fares plus 1/11th of all other amounts a rider pays for the ride (Booking Fees, Split Fare Fees, Airport Fees etc) must be passed on to the ATO. Then, as GST-registered business you can claim back GST credits for the GST (usually 1/11th) included in any expenses for your business. This includes the Uber Service Fees, all the extra fees you pay on to Uber (Booking Fees, Split Fare Fees, Airport Fees etc), plus car running costs, mobile phone bills, stationery and all other costs of being an Uber driver. Here’s an example of what this looks like on a monthly Uber Tax Summary:

How to calculate Taxes on Uber Income

So here’s how the tax calculation works in our example Uber figures above:

Grey Items: You receive these amounts from your rider as income, and then you pass them on to Uber as an expense. As you can see they cancel each other out, meaning you pay $0 GST on these amounts. And that makes sense, because it’s Uber’s money, not yours, so naturally you shouldn’t pay tax on it. But the ATO still requires you to show them as sales first and pay the GST, and then claim them as expenses and claim back that GST.

Income:

Gross Sales =  Uber Fares + Split Fare Fees + Tolls + City Fees + Airport Fees + Booking Fees + Tips

GST on Sales = Gross Sales ÷ 11

Expenses:

Expenses = Uber Service Fees + Split Fare Fees + Tolls + City Fees + Airport Fees + Booking Fees

GST on Expenses = Expenses ÷ 11

GST Payable:

GST on Sales – GST on Expenses = Net GST Payable/Refundable

GST On Uber Expenses

In addition to your rideshare expenses that we covered above, here’s a list of other common GST claims for Uber drivers. The ones marked with (%) may need to be apportioned for business vs private use:

  • Car Expenses (%)
    • Fuel
    • Insurance
    • Repairs
    • Servicing & Maintenance
    • Tyres
    • Cleaning
    • Accessories
    • Hire/Rental Fees
  • Other Expenses
    • Accountancy
    • Computer Expenses
    • Courses & Training
    • First Aid Kit
    • Internet (%)
    • Mobile Phone (%)
    • Music Subscriptions (%)
    • Parking (only during an active shift)
    • Rider Amenities (mints, tissues etc)
    • Stationery
    • Sunglasses
    • Tolls

Expenses that are NOT claimable on your BAS:

  • These expenses do not have GST so they cannot be claimed in your BAS. But they are still tax deductions so they can be claimed on your end of year income tax return.
    • Bank Fees
    • Car Depreciation
    • Car Loan Interest
    • Car Loan Repayments
    • Car Registration
    • Some Government Fees, Licences etc
    • Water
  • These expenses are either considered personal expenses or otherwise are not deductible
    • Clothing
    • Coffee
    • Fines
    • Food
    • Parking at Home
    • Personal Comfort
    • Personal Hygiene
    • Prescription Glasses (only sunglasses can be claimed)

You don’t need a formal 12-week logbook to claim car expenses on your BAS. Instead, for BAS purposes, the ATO only requires you to make a reasonable estimate of the percentage that you use your car for rideshare vs private/other use. But you do still need an official 12-week logbook for your end of year tax return, so my advice is that you might as well keep a proper logbook anyway. But in the meantime, if you haven’t started your logbook yet or you’re only partway through your 12 weeks, it’s nice to know you have the backup option to estimate your percentage for your rideshare BAS instead.

> To learn more about keeping a rideshare logbook, download our Free Tax Info Pack

Free Uber Bookkeeping Spreadsheet
Uber Bookkeeping Spreadsheet

Saving For Your GST Bill

It’s important to manage your GST obligations and save for you GST bill as you go. Otherwise you may get to BAS time and find yourself stuck with a GST bill you can’t pay.

The best way you can do this is by setting up a separate bank account especially for tax savings. Each time you get paid, transfer a set percentage of your earnings into the savings account.

It’s difficult to say exactly how much you should put aside because everyone’s expenses are different, which affects how much GST you’ll pay. But in our experience lodging BAS’s for thousands of drivers, most driver’s GST bills end up being somewhere between 5% and 8% of their net earnings. So if you’re someone who likes to play it safe, put aside 8% of what you receive in your bank account from your rideshare companies. Or alternatively if you want to save the minimum, then put aside 5% for now with the understanding that you may need to top up a little extra at BAS time.

Don’t forget that at the same time you’re saving for your GST bill you also need to be saving for your income tax bill. Visit our blog post on Saving for Your Uber Tax Bill to learn more about this.

 

BAS’s for Uber Drivers

I won’t go into too much detail here, because I’ve written a separate post specifically about BAS’s for Uber Drivers. If you want more detail about lodging your Uber BAS, due dates, and how to pay your GST bill, be sure to check it out. In the meantime, here are the basics.

> Learn more about Uber BAS’s with our Ultimate Guide to BAS for Uber Drivers

What Is A BAS?

A BAS (short for Business Activity Statement) is a form that GST-registered sole-traders and businesses must fill in and lodge to the ATO. On the form you’ll declare your sales and expenses, and calculate your GST bill payable to the ATO.

Most Uber drivers are registered for GST on a quarterly basis, which means they must lodge their BAS to the ATO each quarter. The quarterly dates are as follows:

  • Quarter 1 – 1st July to 30th September
  • Quarter 2 – 1st October to 31st December
  • Quarter 3 – 1st January to 31st March
  • Quarter 4 – 1st April to 30th June

How Do You Lodge A BAS?

There are three ways to lodge your Uber BAS to the ATO.

  • Lodge yourself via a paper form
  • Lodge yourself online on MyGov
  • Lodge through a tax agent

If you plan to lodge your own Uber BAS, the DriveTax Uber Spreadsheet is essential. Easily enter your rideshare income and track your expenses, and then the spreadsheet does all of your GST and percentage calculations for you. At the end of the quarter the spreadsheet gives you the totals you need to enter into your Uber BAS, allowing you to lodge online in minutes.

> Download your Free Uber Spreadsheet as part of our Free Uber Tax Info Pack

If you’d like learn step-by-step how to lodge your own rideshare BAS, our Understanding Uber Taxes online course teaches you everything you need to know. It includes 30+ video lessons on Uber and rideshare tax, a detailed video tutorial on how to use the DriveTax Spreadsheet, and also a complete video tutorial on how to lodge your BAS on MyGov, plus lots more.

> Learn how to lodge your own Uber BAS step-by-step with the Understanding Uber Taxes online course.

Alternatively, if you’d like a tax agent to lodge your BAS for you, our DriveTax Express BAS service is your perfect choice. The Express BAS form gathers your Uber income and expenses, and then we process your BAS within two business days. If we have any questions or suggested extra deductions we’ll contact you by email to chat further. Then your completed BAS is lodged to the ATO, and a copy delivered to your inbox. All of this is great value at $99.

What sets DriveTax apart from other rideshare tax companies is that your BAS is completed directly by a CPA accountant right here in Australia. We don’t use offshore staff or AI automation. So you can be confident that a fully qualified accountant is preparing your rideshare BAS and individually checking that your expense claims are maximised to get you the best possible BAS.

> DriveTax Express BAS service for Uber and Rideshare drivers

 

In Summary

So in summary, here are your key steps in managing and lodging your taxes for Uber and rideshare:

  • Get an ABN and register for GST Go >
  • Track your expenses with the DriveTax Uber Spreadsheet Go >
  • Put aside some of your Uber earnings each week to save for your tax and GST bills Go >
  • Lodge your quarterly BAS’s via MyGov or through the DriveTax Express BAS Service Go >
  • If you want to lodge your own BAS’s, check out the Understanding Uber Taxes online course for a full video tutorial Go >

 

Questions? Thoughts? Pop them in the comments below and I’ll get right back to you!

Safe driving!   – Jess

The information in this article is general in nature and does not take into account your personal circumstances. If you’d like to know how this article applies to you, please contact us to arrange a consultation, or talk to your accountant. 

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Free Uber Tax Info Pack

Jess Murray CPA Uber Accountant

About the Author – Jess Murray CPA – Uber Accountant

Jess Murray is a CPA Accountant and registered tax agent. She’s been working in personal and small business tax for 13 years, and has been specialising in tax for Australian Uber Drivers for the last 5 years as the Director of DriveTax. She also teaches an online course called Understanding Uber Taxes.
Jess is on a mission to make taxes straightforward and manageable for Uber drivers across Australia.

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