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Uber Tax Explained – The Ultimate Guide to Tax for Uber Drivers
Uber taxes are one of the biggest worries for drivers in Australia.
Most drivers I chat to say that dealing with the ATO and their tax obligations for Uber is stressful. It’s also a big hesitation for people thinking about starting with Uber in the first place.
Of course no-one loves paying tax, but we understand that it’s a necessary part of life. Taxes pay for our roads, schools, hospitals and all the other public services we need. So it’s inevitable that rideshare drivers, like everyone in Australia, have to pay tax on their income.
But what makes taxes for Uber and rideshare drivers difficult is that the ATO’s Uber tax rules are complicated. For most drivers, it’s their first time dealing with GST, BAS’s and logbooks, so there’s a big learning curve. The problem is there’s alot of bad tax advice and false information online, and many accountants and tax professionals don’t fully understand how Uber taxes work. So it’s hard to know who to trust.
It’s important to manage your Uber taxes the right way from the start. If you don’t keep records of your tax deductions correctly and save for your tax bill as you go, then it can become very stressful at tax time, and create a financial burden on you and your family.
So in this post, my goal is to explain in detail how Uber taxes in Australia works, and how you can prepare for your Uber tax return in the best possible way so that the end of financial year is simple and stress-free.
A quick note for UberEats and Food Delivery Drivers: most of the information in this post (besides the GST parts) applies to you also. But I’ve also written a specific post on Tax for UberEats and Food Delivery Drivers, so be sure to check that out as well.
Table of Contents
4) Income Tax for Uber
4.1) How Much Tax Will I Pay On My Uber Income?
4.2) How Is Tax On Uber Income Calculated?
4.3) What Uber Tax Deductions Can I Claim?
4.4) How Do You Keep A Logbook For Uber?
4.5) What Receipts Do You Have To Keep For Uber?
4.6) Saving For Your Uber Tax Bill As You Go
5) Tax Returns For Uber Drivers
5.1) What Is A Tax Return?
5.2) Tax Return Due Dates
5.3) How To Lodge Your Uber Tax Return With A Tax Agent
5.4) How To Lodge Your Uber Tax Return On MyGov Yourself
5.5) Paying Your Uber Tax Bill
5.6) Payment Arrangements
Skip To The Good Bits!
Looking for an accountant to lodge your Tax Return?
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Want to learn how to lodge your own Uber Tax Return on MyGov?
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There are two different kinds of tax that apply to Uber drivers, GST and Income Tax. Income Tax applies to everyone, while GST only applies to rideshare drivers. Let’s take a look in more detail.
Yes, Uber income is taxable, just like all income earned by employees, contractors and business in Australia. Every rideshare driver must calculate their rideshare income, subtract their tax deductions, and the remaining profit is taxable income which must be declared to the ATO.
The amount of tax you have to pay will depend on your marginal tax rate. Your marginal tax rate is based on your total taxable income from all sources, including Uber driving plus any other jobs you have. I’ll explain this in more detail below in the section called How Much Tax Will I Pay On My Uber Income?
Note that even if you are below the tax-free threshold and will not have any tax to pay on your Uber income, you MUST still lodge an income tax return. This is because there are different rules for ABN holders than for regular employee-only tax returns. If you earn more than $1 on your ABN, you must lodge a tax return, even if you are below the tax-free threshold.
GST stands for Goods and Services Tax. It’s a tax of 10% on all the goods and services sold in Australia. I’ll explain a little more about how GST for Uber works below.
- Rideshare Drivers: ALL rideshare drivers must register for GST, thanks to special ATO tax laws for taxi and rideshare drivers. The usual $75,000 threshold does not apply. I explain the reasons why in a little more detail in this blog post Do I Have To Pay GST on My Uber Income.
- Food Delivery Drivers: 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 is if your total ABN income (including from other sources of ABN income, but not employee income) is more than $75,000.
- Rideshare AND Food Delivery: If you do both ridesharing AND food delivery, then the rideshare rules apply and you must register for GST.
Once you register for GST, that GST registration applies to ALL business/sole-trader income you earn on your ABN. So if you also do work as a freelancer or independent contractor, or have other small business income, that income will now be subject to GST as well.
If you’re a new rideshare driver, here are the two ATO registrations you will need before you begin driving.
ABN stands for Australian Business Number. Every rideshare and food delivery driver in Australia must have an ABN. You can register for an ABN on the ATO website yourself for free, or you can use DriveTax’s free ABN application service.
We only get one ABN for our whole lifetimes, and we must use this one ABN for all of our business activities. So if you already have an ABN or you have had one in the past then you must use this same ABN for Uber as well. If your past ABN is now cancelled or inactive, you will need to reactivate it to use as your Uber ABN. You can look up your current or past ABN on the Australian Business Register.
Your GST Registration is attached to your ABN. If you don’t already have an ABN, you can apply for your rideshare ABN and GST Registration both in the same application. Or if you already have an ABN you will add your GST registration to that existing ABN.
Again, it’s free to do this yourself via the ATO website, or you can use the DriveTax Free GST Registration Service. We take care of your ATO application for you, including applying for a new ABN or reactivating an old one if you need.
I won’t go into too much detail on GST here because I’ve written a whole blog post just like this one called Uber BAS Explained – The Ultimate Guide to BAS’s for Uber Drivers. You can head there if you want more detail, but for now let me just give you the basics.
All GST-registered businesses in Australia, including all rideshare drivers, must pay GST of 1/11th on their business income to the ATO. 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 the passenger.
You can claim back any GST you pay as part of your business related expenses. This includes the GST that Uber charges you on their Service Fee, and the GST on all the other parts of the fare you pass on to Uber, like the Split Fare Fees and Booking Fees. It also includes expenses you pay for yourself, such as fuel, mints, stationery, and your mobile phone bill (although some of these need to be apportioned for your business vs private use percentage).
A Business Activity Statement (BAS) is an ATO form used to declare your income/sales and the amount of GST payable on those sales (1/11th). You’ll also declare your business expenses and the GST claimable on those expenses. Your GST on Sales minus your GST on Expenses equals your Net GST Payable/Refundable.
Most Uber drivers are registered for GST quarterly, which means they must lodge a BAS and pay GST every three months. There are three ways you can lodge your Uber BAS. You can lodge yourself via MyGov, lodge yourself via paper form, or lodge through a tax agent such as DriveTax. The due date of your BAS depends on which lodgement method you choose:
|Q1 – September Quarter||Q3 – March Quarter|
|1st July – 30th September||1st January – 31st March|
|• Lodge yourself – paper form – 28th October||• Lodge yourself – paper form – 28th April|
|• Lodge yourself – MyGov – 11th November||• Lodge yourself – MyGov – 11th May|
|• Lodge with Tax Agent – 25th November||• Lodge with Tax Agent – 25th May|
|Q2 – December Quarter||Q4 – June Quarter|
|1st October – 31st December||1st April – 30th June|
|• Everyone – 28th February||• Lodge yourself – paper form – 28th July|
|• Lodge yourself – MyGov – 12th August|
|• Lodge with Tax Agent – 25th August|
Q1 – September Quarter
1st July – 30th September
• Lodge yourself – paper form – 28th Oct
• Lodge yourself – MyGov – 11th Nov
• Lodge with Tax Agent – 25th Nov
Q2 – December Quarter
1st October – 31st December
• Everyone – 28th Feb
Q3 – March Quarter
1st January – 31st March
• Lodge yourself – paper form – 28th Apr
• Lodge yourself – MyGov – 11th May
• Lodge with Tax Agent – 25th May
Q4 – June Quarter
1st April – 30th June
• Lodge yourself – paper form – 25th July
• Lodge yourself – MyGov – 12th Aug
• Lodge with Tax Agent – 25th Aug
Again, if you want to learn more about Uber Business Activity Statements and GST, including how your BAS is calculated, what rideshare expenses you can claim on GST, and more detail about how to lodge your BAS, you’ll find it in our Ultimate Guide to Uber BAS’s.
In this next section I’ll break down how the ATO calculates your Uber taxable income and tax deductions. We’ll also cover also what records and receipts you need to keep throughout the year to be prepared for tax time.
The amount of tax you will pay on your Uber profits depends on your total taxable income, which includes income from other jobs and other sources. The ATO uses a ‘marginal tax rate’ system to calculate this. Note that the rates below ill be the same for the 2021-22 financial year.
So for example if you earn $30,000 from your employee job, and you have $5,000 of Uber profits for the financial year, your Uber profit will be taxed at 34.5% (that’s the rate above of 32.5% + the 2% Medicare Levy). Or, if for example you have $15,000 of profits from Uber and no other taxable income, then your whole profits will be below the tax-free threshold and your tax bill will be $0.
As I mentioned earlier, all amounts that you receive from a passenger must be declared as income, and then all the amounts that you pass on to Uber can be claimed as an expense. Let’s take a look at this example of an Uber Monthly Tax Summary.
So here’s how the tax calculation works in our example Uber figures above:
Grey Items: Take a look first at the items marked with a grey dot above, Split Fare Fees, Tolls, City Fees, Airport Fees and Booking Fees. You receive these amounts from your passenger 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 tax on these amounts. And that makes sense, because it’s Uber’s money, not yours, so naturally you shouldn’t pay tax on it. However the ATO still requires you to show the two sides of the equation separately. So in your Uber tax return you’ll declare these amounts as income, and then you’ll also claim them as expenses. So rest assured you do only pay tax on the amounts that end up on your pocket! The ATO just want you to calculate it the long way around.
Income = Gross Uber Fares + Split Fare Fees + Tolls + City Fees + Airport Fees + Booking Fees + Tips
Expenses = Uber Service Fees + Split Fare Fees + Tolls + City Fees + Airport Fees + Booking Fees
Taxable Profit = Income – Expenses
(Of course you will also claim all your car expenses, mobile phone and other Uber expenses, but in this example I just want to show this part of the calculation)
Tax deductions are important because they reduce your taxable profit, and therefore reduce the amount of tax you have to pay on your Uber profits. Here’s a list of common tax deductions for Uber drivers. Note that for some that I’ve marked with (%) you will need to apportion your tax deduction for business use vs private use:
- Rideshare Fees & Charges
- Rideshare Company Service Fees
- Booking Fees
- Split Fare Fees
- Airport Fees
- Government fees
- Car Expenses (%) (only deductible if you have a valid logbook)
- Servicing and Maintenance
- Hire/Rental Fees
- Loan Interest (not the whole repayment)
- Depreciation (including the Instant Asset Write Off)
- Other Expenses
- Bank Fees
- Computer Expenses
- Courses & Training
- Fees, Licences, Permits
- First Aid Kit
- Internet (%)
- Mobile Phone (%)
- Music Subscriptions (%)
- Parking (only during an active shift)
- Rider Amenities (mints, water, tissues etc)
- These expenses are considered personal expenses or otherwise are not deductible
- Parking at Home
- Personal Comfort
- Personal Hygiene
- Prescription Glasses (only glasses with sun protection can be claimed)
For motor vehicle deductions, as an alternative to the logbook method, the ATO also gives us the cents per kilometre method to claim a deduction for your Uber car expenses. You may claim up to 5,000km per vehicle per year at 72 cents per km for the 2021 financial year giving a maximum claim of $3,600 (for earlier financial years it’s 68 cents per km for a maximum $3,400). On the up-side, claiming the cents per kilometre method is very simple, with no logbook or record keeping required. But the downside is that this claim may be well below what you actually spent, especially if you drove full-time. So you should consider carefully which option you will choose before you start driving, so that you can keep the proper records from day one.
A logbook is a record of your car usage that that is accepted by the ATO as evidence of the business use percentage of your car. Your logbook tells you what percentage of your car expenses are tax deductible.
Here are the essentials of keeping a logbook for rideshare driving:
- It must go for 12 continuous weeks, but you can choose what time of 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.
- Your kilometres to and from home at the start and end of each driving session can be included, as well as kms in between trips.
Once you have kept your 12-week logbook, you can continue to use that same logbook for Uber for up to five years as long as your pattern of usage stays the same. If your pattern of usage does change by +/- 10% your logbook becomes invalid and you must keep a new one.
The ATO doesn’t mind what format you keep your Uber logbook in, as long as it has all the required details.
- Paper Logbook – if you want to keep a physical paper logbook we recommend the Zions Pocket Logbook, which you can buy from Officeworks for under $7. You will then need to manually add up every trip and your total kms at the end of the 12 weeks
- Spreadsheet – if you prefer a spreadsheet, the Free DriveTax Uber Spreadsheet includes a free Uber Logbook Spreadsheet that is fully compliant with the ATO. It’s a great time-saver, as it does all the adding up and calculates your percentage for you automatically.
- Logbook App – Search the App Store for a logbook that is ATO compliant. However you must still manually record your odometer readings at the start and end of every trip because an app cannot do this for you automatically
The ATO require you to have receipts or records of all business related deductions. For your tax return any receipt or records is acceptable, including bank statement records. However for GST credits on your BAS the rules are a little stricter. For expenses over $82.50 you must have a tax invoice. For expenses below $82.50 any receipt or record is acceptable.
I always recommend paying all expenses by bank card rather than cash so that even if you lose the receipt you will still have bank records, and therefore you will still be able to claim most GST credits and all tax credits.
Keeping receipts of your Uber expenses can be a pain. It’s easy to miss expenses or loose receipts, which means you’re missing out on tax deductions. So it’s important to have a system for keeping your receipts.
The easiest way to keep your paper tax receipts is to buy an expanding file like this one. Mark each section with a category of expenses, for example fuel, other car expenses, phone bills, water & mints, stationery etc. Then grab a large envelope to keep in the glove box of your car to collect receipts while you’re on the go. File these into your expanding file on a regular basis.
For digital receipts, you do not need to print them, the ATO does accept digital receipts and invoices. Instead, create a tax receipts file on your computer or in your email inbox for any receipts that come via email. A quick tip, put the relevant quarter and financial year into the filename of each invoice, e.g. 2020 Q2, so that you can easily identify the receipts you need at the end of each quarter for your BAS, and at the end of the year.
If you’re a rideshare driver you will need to add up your expenses quarterly, in order to lodge your Uber BAS. Food delivery drivers, you only need to add up end of year totals. However for both groups of drivers it’s better to add up your expenses more regularly, monthly at the least. This will ensure you always know how your Uber profits are going, and therefore how much you should have saved up for your end of year tax bill. More on that shortly.
To track and add up your expenses, you have two main options.
- Option 1 – Spreadsheet: If you like keeping computerised records, download the FREE DriveTax Uber Bookkeeping Spreadsheet. I’ve custom-built this spreadsheet for all major ridesharing & food delivery companies in Australia, including Uber, Ola, DiDi and more. It’s quick and easy to enter your expenses, whether you like to do so weekly or in one bit hit at the end of the month or quarter. It has a colour-coded interface to make it super simple to use, and the expense categories will help you think of expenses you may have forgotten to claim. If you want to lodge your own BAS’s and Tax Returns you can upgrade to the paid version which includes a BAS Summary and a Tax Summary, giving you all the totals you need to enter straight into MyGov. The spreadsheet also includes our free DriveTax Logbook Spreadsheet, which makes it simple to keep your official ATO 12-week logbook for your end of year tax return.
- Option 2 – Adding Up Manually: If you prefer a non-digital option, manually adding up your physical and digital receipts is completely fine too. However this option is not recommended if you plan to lodge your BAS and Tax Return for Uber yourself, as you will need a spreadsheet to calculate GST and calculate your tax return totals. But if you plan to lodge your BAS and Tax Returns through DriveTax or another tax agent, the manual method is no problem at all.
Once you’ve lodged your rideshare tax return, you need to keep your receipts and records for five years. Be sure to file them somewhere safe, and mark them with the date five years from now as the ‘throw out date’. Before you do this, you may like to check for any receipts that might fade and either photocopy them, or take a photo on your phone and email it to your receipts file on your computer. The ATO accepts copies and scans, you don’t need to have the original.
It’s important to save for your BAS and tax bills on a weekly basis as soon as you get paid. Otherwise you may get to BAS or tax time and find yourself stuck with an ATO bill you’re not able to pay. This is one of the biggest challenges of being self-employed. As an employee our employer takes care of our tax obligations for us by withholding tax from our pay. But as a rideshare driver you’re responsible for your own tax obligations, and you must save for your GST and tax bills yourself.
The best way you can do this is by setting up a separate bank account especially for tax savings, and then each time you get paid, transfer a set percentage of your earnings into the savings account.
Working out exactly how much to save is tricky because your tax rate depends on how much income you earn from other sources, and this is different for everyone. Uber expenses are also different from one driver to the next. For example, some cars cost more to run than others, you may have a car loan and claim deductions for interest or you may own your car outright, you may pay to have your car cleaned or wash it yourself, your mobile phone bill might be higher or lower than the average… the list of variables goes on! So working out what percentage of your Uber earnings to put aside is difficult.
I’ve written a separate blog post on this top called Saving For Your Uber Tax Bill. Here I show you how to work out the right amount to save for your Uber tax bill based on your personal circumstances.
At the end of the financial year you must lodge an income tax return and declare your Uber income and expenses to the ATO. This next section explains how to lodge your Uber tax return.
An income tax return is a form that everyone in Australia must lodge to the Australian Taxation Office to report their income for the financial year, which is 1 July to 30 June.
The ATO requires every Australian rideshare driver to lodge a tax return, even if they are below the tax-free threshold. This is because all ABN holders in Australia must lodge a tax return and declare their business income if they earned more than $1 on their ABN.
All of your income from all sources is included in your one tax return. This includes from employee jobs, investment income, business/ABN income, and of course rideshare and food delivery income. You can then claim tax deductions for your Uber expenses, and for expenses directly connected to your other sources of income too. These tax deductions help reduce your tax bill.
At the end of the tax return, your income minus your expenses equal your taxable income. The ATO will calculate your tax bill based on your taxable income.
The Individual Tax Return due dates depend on when and how you lodge your return.
- Lodging your own Tax Return – if you will lodge yourself via MyGov, the due date for your Uber tax return is the 31st of October
- Lodging via a Tax Agent – if you lodge your rideshare tax return through a tax agent, the due date depends on whether you lodged your last tax return on time
- If at the 30th of June you have a previous tax return that is unlodged, your current tax return will be due on the 31st of October
- If at the 30th of June you have lodged all your previous tax returns, your current tax return will be due on the 15th of May
If any of these dates fall on a weekend or public holiday, the due date is the next business day.
Most Uber drivers choose to lodge their tax returns through a tax agent. At DriveTax, our Express Tax service is the quickest and simplest way to lodge your rideshare tax return online through a registered tax agent, CPA accountant and Uber tax expert.
The DriveTax Express Tax form gathers your Uber income and tax deductions, and guides you through all the tax deductions you might be able to claim. It will also gather all the other bits and pieces we need for your tax return, such as employee work-related expenses and family details. You don’t have to worry about sending us your payment summaries, bank interest and private health insurance details, we’ll download them directly from the ATO for you. Once you’ve submitted your form, processing time is three weeks during July-October, or two weeks for the rest of the year.
Our standard fee for an Uber tax return is $187, and this includes all your Uber income and deductions, employee or investment income and deductions, and all other parts of your regular tax return. Complications such as rental properties or capital gains may incur extra fees. We also do non-Uber tax returns at a fee of $140 if you’d like your spouse or family member’s tax return done too.
What makes DriveTax different from other rideshare tax companies is that your tax return 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 Uber tax return and individually checking that every tax deduction is maximised, so you can be sure you’re getting the best possible tax refund.
If you prefer to lodge your tax return yourself, our DriveTax Uber Spreadsheet is essential. I have custom-designed the spreadsheet to match all the major rideshare companies in Australia, including Uber, Ola, Didi and more. It categorises your expenses, applies your logbook percentage and other private use percentages, and then will give you the totals for both your quarterly BAS’s and your annual tax return.
Once you have the totals you need, you can lodge your tax return to the ATO for free online via MyTax, which you can access through your MyGov account. You will need to complete the business schedule for your income and deductions, and then the remainder of your tax return as per usual.
Lodging your own tax return can be difficult, especially if you haven’t used the business schedule in MyTax before. So if you’d like learn step-by-step how to lodge your own rideshare tax return, 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 Uber tax return on MyGov, plus lots more.
If you have tax to pay, the ATO will show the amount of your tax bill on your Notice of Assessment. They will send this to your MyGov roughly two weeks after your tax return has been lodged. You will get an email notification that it’s ready, and then you will need to log into your MyGov to view it.
The due date for payment of your tax return will vary depending on when you lodged it.
- If your lodgement due date was the 31st of October:
- If you lodged on or before the 31st of October, your tax bill due date is either the 21st of November, or 24 days after your Notice of Assessment date if that is later than the 21st of November
- If you lodged after the 31st of October, your tax bill due date is the 21st of November
- If your lodgement due date was the 15th of May:
- If you lodged on or before the 12th of February, your tax bill is due on the 21st of March
- If you lodged from the 13th of February to the 12th of March, your tax bill due date is the 21st of April
- If you lodged on or after the 13th of March, your tax bill due date is the 5th of June
You can pay your tax bill to the ATO through a variety of methods, including credit card, Bpay, bank transfer or at the post office. You can find the ATO’s payment details on your Notice of Assessment, or in your MyGov account.
If you’re not able to pay your Uber tax bill by the due date, don’t worry. The ATO know that it can be hard, and they’re usually happy to set up a payment arrangement for you. This will allow you to pay your tax bill in instalments over time. You’ll generally have to pay 20% deposit upfront, and then the rest is spread over a period of your choice, up to a maximum of two years.
The easiest way to set up a payment arrangement is via your MyGov. Alternatively the ATO have an automated phone service where you can set up a payment arrangement for your Uber tax bill without even speaking to a person. You can learn more about both of these options and check out the ATO’s repayment calculator on their Help With Paying webpage.
If you do set up a payment arrangement for your tax bill, the ATO require you to meet all of your future tax obligations and GST obligations, which means lodging and paying all future BAS’s and tax returns on time and in full, otherwise your payment arrangement will default. So although it can be tough to juggle, it’s important to keep saving for your future tax bill at the same time as you’re paying off the previous one.
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 and keep a logbook with the DriveTax Uber Spreadsheet Go >
- Put aside some of your 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 tax return through a tax agent, head to the DriveTax Express Tax form Go >
- If you want to lodge your own Uber tax return, 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.
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.