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In Australia, the rideshare partners carrying on an enterprise or Uber are liable for a GST registration and income tax on their earnings as per the recommendation of the Australian Taxation Office (ATO). When you drive for Uber, you are considered a contractor rather than an employee. This makes it important for you to manage your tax affairs correctly either by yourself or by taking the assistance of a local tax consultant.

What Is Rideshare Tax?

For anyone who has a car, Uber and other Rideshare platforms offer a great opportunity to earn an extra income or part-time work. But, the income earned via rideshare is eligible for a tax deduction. Any driver who uses a car to transport passengers to their destinations and charge a fee to earn profit is said to be engaged in Ridesharing.

According to ATO, you must declare your Uber or Rideshare income on the tax return form. No matter, how much you earn as a driver, even if it is less than $75,000, you need to register for GST. To prevent any tax complication, charge GST on every fare, declare your earning and pay tax on time.

How To Charge GST From Customers?

Once you have an ABN and registered for GST, you can ride stress-free on the Australian roads. To charge GST from customers, calculate it on the full fare rather than the net amount. The chargeable percentage of GST is 10%.

Steps To Register & Pay A Rideshare GST

  • Apply for an Australian Business Number (ABN).
  • Register for Goods and Services Tax (GST).
  • Provide your Tax File Number (TFN).
  • Follow the prompts of Australian Business Register (ABR).
  • Get your Australian Business Number (ABN).
  • Register via the portal of Australian Taxation Office (ATO).
  • Lodge your Business Activity Statement (BAS) quarterly.
  • Either pay online or by post or in-person at Australia Post.

Which Tax Deduction Can Be Claimed?

Being a Rideshare or Uber driver, you can claim GST credit or tax deduction on any purchase related to buying or leasing a car and operating costs associated with it. This includes:

  • Registration
  • Insurance
  • Repairs
  • Servicing
  • Tyres & Fuel
  • Maintenance
  • Cleaning Costs
  • Parking Expenses

In order to claim any of the above mentioned deductions, you’ll need to keep all records in a logbook or an online accounting tool with proper receipts. This will help you calculate your vehicle expenses in a way ATO expects and accepts. If you want to file a rideshare tax or need to claim the tax deductions, rely on our trusted accountants in Dandenong. For any other tax information, feel free to contact us anytime.