Being a rideshare driver such as Uber or Ola is a good way to earn some cash on the side. However, the income that you get from this is treated slightly differently; you are recognised as a CONTRACTOR, not an EMPLOYEE. On top of that, most rideshare companies require drivers to register for GST and lodge Business Activity Statements (BAS), even if your turnover is below $75,000.
Most rideshare companies do not withhold taxes from income, which might cause some drivers to find out that they owe the ATO a large Tax Debt during Tax Time. To ensure that you are prepared for this, it is recommended is that you set aside a portion of your income to pay off the tax owed to the ATO. You can use our Simple Tax Calculator as a rough estimate of how much to set aside.
Some examples of Deductions that can be claimed are:
- Motor Vehicle Expenses
Most rideshare companies require their drivers to provide logbooks to show no. of kms travelled. By keeping all receipts for motor vehicle expenses, the entire logbook can be used as proof to claim the following expenses:
- Registration Fees
- Insurance Expenses
- Repair Expenses
- Tyre Expenses
- Car Maintenance Expenses
- Car Cleaning Expenses
- Work-Related Parking Expenses (Either keep receipts to claim total amount, or claim up to $200 per year if your parking fees are less than $10 each)
For more information on Motor Vehicle Expenses, click here.
- Mobile Phone Expenses
You would have to estimate the percentage that is used for work, and you can only claim that work-related percentage.
- Stationery Expenses
- Subscription Expenses
Examples of subscription expenses that are work related include Spotify and Apple Music for clients when driving your vehicle
- Eligible Donations
Any donations made to eligible charities of more than $2 are deductible, so keep the receipt if you sponsor the local bowls club!
- Accounting fees
Any accounting fees (including using a Tax Agent) are deductible so why would you do it yourself!
The most important thing for deductions is to keep records of them. As mentioned earlier, maintaining a logbook is a great way to keep track of your kms travelled. Keeping receipts for all expenses is also important when it comes to making claims. If the ATO ever conducts an audit, you would be able to show your expenditure, keeping you safe from having to pay back deductions that you can’t prove.
If you are unsure of how to lodge your Tax Returns/BAS or calculate your deductions, it is recommended that you consult a Tax agent who can give you proper advice.