Driving for Uber can be a fun and flexible way to earn extra income. But taxes in the gig economy are complicated. If you’ve never had an ABN or run your own business before, then your Uber taxes can be tough to handle. Here are some important things to consider regarding how you manage your taxes as a rideshare driver.

Step 1: Get your Tax File Number

Your Tax File Number (TFN) is the business number on your tax return. It comes up on your tax return as the Australia Business Number (ABN). You have got to have one of these if you’re working as a rideshare driver. The ATO has no way to figure out how much you made as a rideshare driver without an ABN.

To get your ABN, you need to fill out an application form online. Your ABN will be issued immediately. Once you have your ABN, you can use it to set up your business bank account.

Step 2: Set Up a Business Bank Account

As a rideshare driver, you need to collect GST on all your fares. This means you need a business bank account and a business bank card. Setting up a business bank account is easy and takes just minutes. The bank account needs to have your Tax File Number (ABN) attached to it. You can also ask the bank to put your ABN on the bank card.

The business bank account is where you will deposit your earnings. You will then use those funds to pay your Uber taxes.

Step 3: Calculate your GST

If you’re a rideshare driver, then you must be aware that Uber takes out a payment for GST from each fare you earn. The fare you charge your customer is made up of the amount of the trip fare and GST. But how do you know how much GST you should pay? The GST calculation is pretty simple. Here’s how.

All you do is take the total earnings off the Uber trip fare and reclaim the GST. The difference is how much you must pay in GST. You then take that amount and put it into your business bank account.

Step 4: Calculate Your PAYG Income

Pay-as-you-go income is how much you make on a weekly or monthly basis. It includes your earnings from Uber and your other sources of income. For example, if you have a second side hustle, like a part-time job or selling something online, then add that to your Uber earnings to calculate your income.

It sounds obvious, but you must include all your income on your tax return. This way, you can claim all your deductions and keep the amount of tax you owe to the minimum.

Step 5: Fill Out Your Tax Return

It’s time to fill out your tax return. As a rideshare driver, you’re required to fill out a Business Activity Statement (BAS). This is a report that shows the income and tax you have paid. It’s easy to fill out. Just type in the details of your Uber income and the last four digits of your tax card.

Be sure to attach some proof of the income you earned; otherwise, you won’t be able to get your tax return back.

Step 6: Pay Your Uber Tax

After you’ve calculated how much income tax you owe, it’s time to pay it. You can pay your tax at the same time you file your tax return. It’s easy. You can do it by scanning your tax return, bank statements, and receipts for tax deductions. This way, you can clean up your tax return and save on fees.

Final Thoughts

It’s easy to pay taxes as a rideshare driver. You just need to know how to handle your Uber taxes the right way. By keeping track of your income and GST, you can pay your tax in one fell swoop. Just remember to keep track of your income and GST.

If you’re not sure how to deal with your Uber taxes the right way, then rely on the services of Rideshare Tax. We offer a free app designed to help rideshare drivers manage their earnings and taxes while on the go. It’s arguably the best tax software for rideshare drivers in Australia today. Download the Rideshare Tax app today!