Joining the sharing economy in Australia is a great way to earn flexible income. Some of the workers in this industry are drivers that work for Uber and UberEats, as well as DoorDash, Menulog, Amazon Flex, and more. They have the freedom to choose their work hours and have personal ownership of their work vehicle. Since they are considered independent contractors, they operate under a Sole Trader business structure. This means they are required to register for an ABN.
ABN, which stands for Australian Business Number, acts as the public identification number of Australian businesses. Sole traders, companies, and business owners must register for it since it can serve as an additional number for invoice, documentation, and advertising purposes.
Registering for an ABN as an Uber or UberEats Driver
Uber and UberEats drivers in Australia should have an ABN. In fact, registering for one is required before they can start driving. This rule also applies to other food delivery service providers or ridesharing companies.
Workers are provided only with one ABN by the Australian Taxation Office (ATO) to be used for all business activities. This means those who have already registered or have had one in the past must use this ABN for Uber or UberEats. On the other hand, cancelled or inactive ABN must need to be reactivated. Current or past ABN can be looked up on the Australian Business Register.
Registering for GST for Uber or UberEats
ABN holders earning more than a dollar on the ABN for the year must declare their business income and tax deductions on the income tax return at the end of the financial year. Uber and UberEats drivers are also entitled to tax credits. They can claim rideshare service-related expenses.
Additionally, rideshare drivers should register for Goods & Services Tax (GST) regardless of their income. Registering for it requires an ABN first. According to ATO rules for taxi and rideshare drivers, the usual GST registration threshold for small businesses of 75 thousand dollars does not apply. Instead, one dollar is the registration threshold.
On the other hand, Uber or UberEats drivers whose income earned on their ABN is only through
ridesharing may not register for GST. In other words, if delivery or ridesharing is your only source of income, registering for GST is not required. This is because reaching the registration threshold of 75 thousand dollars even if driving full time is virtually impossible. Most ridesharing or delivery drivers don’t reach this level. You would only have to register for GST if you have other income on your ABN. However, it should be noted that those who drive for both Uber and UberEats must register for GST. After GST registration, drivers should lodge a Business Activity Statement to the ATO quarterly to declare their income and expenses.You will then have to pay GST on all of your ABN income, including revenue earned via ridesharing or delivery.
Applying for an ABN for UberEats and Uber
Registering an ABN for Uber or UberEats can be completed on the ATO website. Those with already active ABN will have to add their GST registration to it. Applying for both can also be done in one transaction for drivers who still don’t have an ABN.
All Uber and UberEats drivers in Australia should have an ABN. Registering for one can be confusing, especially for those newly self-employed and never had an ABN before. Thankfully, following this guide can help make the registration process as smooth as possible. Another way to achieve this is to use an app like ours.
Rideshare Tax is a free app created by tax agents and accountants. We help keep track of your income and expenses by doing the calculation for you. Schedule an appointment today!