Driving for Uber, DiDi, Ola or another ride-sourcing platform makes you a business in the ATO’s eyes, even if you only drive on weekends alongside a full-time job. That brings GST, BAS and income tax obligations that catch many drivers out. This guide explains how a rideshare tax return works, what you can claim and what you cannot.
ABN and GST: the rule that surprises most drivers
Most small businesses only need to register for GST once turnover reaches $75,000. Ride-sourcing is different. You must have an ABN and be registered for GST from the day you start driving, regardless of how much you earn. The only exception is if you are an employee of the platform, which is rarely the case. GST applies to every dollar of fares, and penalties and interest can apply if you do not register.
BAS lodgement
Once registered, you lodge a business activity statement (BAS) monthly or quarterly. In it you report GST collected on fares and claim GST credits on the business portion of your costs. You cannot claim GST credits on purchases for personal use. Passengers can also ask you for a tax invoice for fares over $82.50 including GST.
What income to declare
All money earned from ride-sourcing is assessable income, including fares, tips and bonuses from the platform. Report the gross amount and claim the platform’s fees or commission as a deduction, rather than reporting only the net amount paid into your bank account. Ride-sourcing income goes in the business section of your individual tax return, alongside any wages from other work.
Deductions you can claim
- Fees or commission charged by the platform
- Car running costs for the business portion of your driving, using the cents per kilometre method (up to 5,000 business kilometres a year) or the logbook method (a minimum 12-week logbook, valid for five years)
- Fuel, car lease payments, parking fees and tolls where the passenger did not pay them
- Passenger amenities such as bottled water, mints and tissues
- Wipes, sanitiser and cleaning products for the vehicle
- State commercial licences and accreditation, including driver accreditation, registration, medical tests and police checks
- The business portion of your mobile device and plan
- Depreciation on assets you own, such as the car under the logbook method or a phone mount
- Tax agent fees
Only the business portion is deductible. Driving to and from your main job is private, and you are only “on the job” while collecting and transporting passengers. If you claimed a GST credit on a cost, the income tax deduction is the amount excluding GST.
What you cannot claim
- Speeding, parking or other fines
- Getting or renewing your ordinary driver licence
- Meals bought while on a break
- The private portion of car costs
- Trips where the main purpose was private
- Ownership costs, such as depreciation, on a car you borrow from someone else
Records to keep
- Platform income summaries and weekly statements
- Receipts for all expenses (fuel can be estimated from odometer readings under the logbook method)
- Your logbook and odometer readings if you use the logbook method, or diary records showing how you worked out business kilometres under the cents per kilometre method
- Bank statements for the account your earnings are paid into
Keep records for five years after you lodge. The platforms report drivers’ income to the ATO, so what you declare needs to match what they send.
Frequently asked questions
I only drive a few hours a week. Do I still need GST registration?
Yes. The GST registration requirement for ride-sourcing applies from your first fare, no matter how little you earn.
Can I claim my whole car?
No. You can only claim the business-use percentage, worked out with a logbook, or up to 5,000 business kilometres under the cents per kilometre method.
Does this apply to food delivery?
Delivery drivers also declare their income and can claim business expenses, but the GST-from-day-one rule is specific to transporting passengers. Delivery-only drivers follow the normal $75,000 GST threshold.
Rideshare tax returns in Melbourne’s west
Kennedy Tax & Business Services prepares tax returns and quarterly BAS for rideshare drivers across Footscray, Williams Landing and Melbourne’s west, including GST registration for new drivers. See our tax return preparation and BAS lodgement services, or contact us to book an appointment.
This article is general information only and does not take into account your personal circumstances. Figures are from ATO ride-sourcing guidance. Speak to a registered tax agent before acting on it.
