Statistics show that busy Australians are obsessed with meal delivery. According to recent data, Australians spend more than $2.6 billion each year on food and drink delivery services such as Menulog, UberEats, and Deliveroo. 

Because of the increased demand for food delivery services, the number of food delivery drivers has increased. There are tax ramifications for each activity that generates revenue. Here are important tax facts you need to know as a rideshare and food delivery driver.

What Uber and Other Rideshare Drivers Need to Know About ABNs and GST

Aside from income tax, you should be aware of the Goods and Services Tax (GST). It refers to the 10% tax on all goods and services you supply in Australia. Here’s a quick rundown:

  • Rideshare Drivers: You must register for GST as a rideshare driver. Unfortunately, you do not meet the $75,000 requirement.
  • Drivers of food delivery services: The good news is that food delivery services like Uber Eats do not need to be GST-registered. However, if your Australian Business Number generates more than $75,000, you must do so.

If you work as a rideshare driver and a food delivery driver, you must observe the rules that apply to ridesharing employees. This implies you’ll have to register for GST.

As a rideshare driver, you are running a small business; thus, you need to obtain an Australian Business Number. This 11-digit number reflects your company and is required when you register for GST.

Do You Have to Pay Income Tax?

Because you earn money from your ridesharing business, the law requires you to report it and submit it correctly on your tax return. Calculating your taxable income is straightforward since it operates the same way as it does for other firms. Here are some quick ideas to help you with your income tax filing:

  • Know your entire profits first before deducting any additional deductions, such as GST credits.
  • You can obtain a record of your earnings by contacting the ridesharing operator.
  • Make a list of all the costs you paid for.
  • Then, subtract the amount on your costs list from your total earnings to arrive at your taxable income.

If your annual income is less than $18,200, you will be tax-free. This means you are not required to pay any income tax. However, being in this tax bracket does not exclude you from filing a tax return.

Tax Deductions You Can File as a Delivery Driver

As with any company, you may claim a variety of tax deductions as a delivery driver. In general, you may be qualified to make the following claims:

  • Tolls commissions, licensing, or service fees paid to the food delivery platform
  • Parking
  • Renewal of a vehicle’s license or registration
  • Bills for mobile phones
  • Automobile expenditures
  • Equipment for safety (such as hi-vis vests)
  • Personal safety equipment
  • Costs of cleaning, servicing and repairing your automobile, motorcycle, or scooter
  • Insurance
  • Fee for a tax advisor/accountant
  • Bank charges (if you maintain a separate account for your food delivery work)

You are not permitted to claim deductions for:

  • The cost of getting a standard driver’s license
  • Parking tickets, speeding tickets and so forth.
  • Clothing that is not safety
  • Meals and beverages purchased while on duty

If you want to claim any deductions, you must keep track of any business-related costs that you intend to claim on your tax return. Receipts, expenditures and bank statements are examples of such documents. 

Final Thoughts

It is a legal obligation in Australia to disclose your earnings as a rideshare or food delivery driver, and they must be included as assessable income on your tax return. The ATO takes the under-reporting of earnings very seriously, and failing to disclose your income correctly may result in fines and interest charges.

Despite all the information that we’ve listed above, doing your taxes can still be overwhelming. The best you can do is download the best tax software for rideshare drivers instead of managing on your own. Rideshare Tax is a free app designed for this purpose. We provide free GST and ABN registration and help you manage your rideshare business easily in just a few taps. Download the app today!