Ever since Uber was launched in Australia, it has taken the country by storm and has actually become one of the most lucrative ways to earn additional income. While being an Uber Driver-Partner is an amazing opportunity, you need to be aware of some of the tax implications involved in it. The following is a tax guide for Uber drivers in Australia, so you won’t be surprised when the ATO comes knocking on your door for an audit.
Goods and Services Tax (GST)
Being an uber driver is a unique and flexible opportunity to earn a side income for almost anyone with a good car. However, like any other business, if you’re earning over $75,000 a year, you need to register to collect the Goods and Services Tax (GST) and lodge a Business Activity Statement every month or quarter.
As an Uber driver, it is your responsibility to register and collect the GST on all your fares and fees if you want to continue operating as a legitimate business. Yes, that means GST is applied whenever a passenger pays you for your service. This is different from the GST you need to pay for the fees Uber charges you to supply passengers. While Uber treats fees and fares to be one transaction and pays you the difference, the ATO sees fares and fees to be separate transactions and should be calculated separately.
GST Claims and Benefits
For all of the costs on your business that incurred GST, you can earn and claim back GST credits. Of course, you need to be registered first and have your ABN before you can do this.
GST works as a 10% full rate on your fare regardless of how much you earned from it. All these earnings and GST will need to be declared and lodged. As a share-driver, you need to lodge your Business Activity Statement (BAS) monthly or quarterly, where you need to state your income. It’s also best to keep a record of all your expenses for the past five years if you want to be able to claim your GST credits.
Claiming Work-Related Tax Deductions
Similar to other businesses, an Uber driver has the opportunity to claim deductions for the expenses incurred while driving for Uber. These may include costs related to holding, maintaining or operating any assets used to provide the ride services. Deductions can be claimed for the business use portion of the following:
- Commissions, licensing, or services fees paid to Uber
- Costs of becoming an Uber driver, which includes medical and police checks, and application fees
- Parking fees
- Passenger costs, such as water and fuel for the car
- Vehicle licensing and registration
- Mobile phone bills
- Tax agent or accountants fee
- Safety equipment
- Costs of cleaning, servicing, and repairing your vehicle
These are just a few of the work-related deductions you can claim as an Uber driver. However, bear in mind that the costs of getting a driver’s license aren’t tax-deductible. You also can’t claim any fines or penalties you’ve incurred while driving or the meals and drinks you’ve consumed while you’re on shift.
Being an Uber driver is perhaps one of the best decisions you’ve made in your life and is an entirely viable way of earning some extra income. However, a responsible Uber driver needs to have knowledge of the tax-related obligations stated here in order to provide a legitimate service to their passengers.
Rideshare Tax is your partner when it comes to managing your BAS and your taxes. Whether you’re a driver for Uber, Didi, Ola, Shebah or other ridesharing services, we offer you an excellent opportunity to keep track of all your taxes. Our rideshare accounting app lets you lodge your BAS and add all your expenses on the go to maximise your tax return. Sign up now and experience the best tax software for rideshare drivers!