Rideshare & Delivery Driver Tax Requirements

If you work as a rideshare or delivery driver, you are considered a sole trader for tax purposes. This means you need to be on top of managing, calculating and paying your own taxes and GST.

Here is everything you need to know about your tax requirements as a rideshare driver. 

Paying tax on rideshare income

All the major providers like Uber, Uber Eats, DoorDash and Menulog require you to be set up with your own ABN. You’ll also need to make sure that you’re registered for GST as a part of that process. If you’re a delivery driver and your income sits under the GST of $75,000, you won’t need to worry about GST.

From here, it’s now up to you to ensure you’re tax-compliant with the ATO.

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Tax brackets

The ATO decides how much tax you pay based on a sliding income scale.

For the 2024-2025 financial year, the scale is:

It’s really important to remember that you’re not just calculating this on your rideshare or delivery earnings alone. You must include all forms of employment and sole trader activities, even if your other work is as an employee and your employer organises your tax withholding.

Remember that you may only claim the $0 - $18,000 tax-free threshold once, so if you’ve claimed it for another job, make sure you’re not claiming it for your rideshare earnings.

It’s also very important to include any tips you receive from passengers in your income.

The Medicare levy

Another thing you’ll need to consider is how your income will affect your Medicare levy.

The Medicare levy is a compulsory amount you pay on top of your other tax obligations. Unless you’re eligible for exemptions or reductions due to low income or other medical concerns, the Medicare levy will equate to 2% of your total taxable income.

Example:
Once Mateo has removed any deductions, he works out that his accessible income for the year is $70,000.

Therefore, the amount of Medicare levy he will have to pay is:
$70,000 x 0.02 = $1,400

This will be added to his total tax bill. The full working example of his return looks like this:

At $70,000, Mateo’s income falls into the third tax bracket - $4,288 plus 30c for each $1 over $45,000.
$70,000 - $45,000 = $25,000

He has to pay 30c for each $1 of  $25,000 of his income.
$25,000 x 0.3 = $7,500 + $4,288 (from the second tax bracket) = $11,788

$11,788 + $1,400 Medicare levy = Total tax bill of $13,188

If you don’t have private health insurance, you may also be liable to pay a Medicare levy surcharge in addition to the standard 2% levy. 

The Medicare Levy Surcharges are set as follows for the 2024 - 2025 financial year:

Private health insurance

It’s important to remember that your income also dictates how much you pay for your private health insurance.

The ATO offers a rebate for those with a valid private health insurance policy. It is calculated on a sliding scale based on your or your family’s total taxable income.

You can claim the rebate either directly through your health insurance provider in the form of reduced insurance premiums or as a tax offset when you lodge your return. 

Lodging your tax return

You must lodge your tax return at the end of the financial year (after June 30). You can self-lodge with the ATO via the myGov portal, or go through a registered tax agent.

Tax deductions for rideshare and delivery drivers

Just like in any job, if you incur any expenses in your work as a rideshare or delivery driver, you’re eligible to claim these as a deduction.

Some deductions may include: 

• Asset depreciation on your vehicle 
• Fees or commissions charged by your chosen digital platform (e.g. Uber, Uber Eats, Menulog, DoorDash)
• Work-related car expenses like parking fees, tolls or repairs
• Fuel costs - be sure that you’re keeping a logbook so that you can separate personal and business use in your vehicle
• Things like bottled water, tissues, mints or sanitisers you provide to passengers
• Car cleaning products and costs
• Any commercial licenses or approvals required by your state to become a rideshare driver (your driver’s licence is not included in this)
• Tax agent fees if you use an accountant to prepare your tax return
• Accounting software costs you use to prepare your tax return

Calculating GST

You must also meet your quarterly GST repayments as a self-employed driver. As these are due regularly, it's recommended that you put away 5-8% of your earnings.

GST is calculated on the full fare (not the net amount you are paid) that passengers pay to use your services as a rideshare provider.

All the major platforms, including DoorDash, Menulog, and Uber, calculate this for you, and it is clearly visible on their statements. 

Here is a quick example of how GST is calculated:

Everly has just accepted a rideshare job where the passenger is paying $55.

The GST amounts to 1/11th of the fare:
$55 / 1.1 = $50, therefore, there is a $5 total GST payable

Because all rideshare platforms also take out fees or commissions from the fare, you may be entitled to claim a GST credit:

Everly’s rideshare platform charges an $11 commission on the $55 fare she has just earned.

The same equation applies to this transaction:
$11 / 1.1 = $10, so Everly is entitled to a GST credit of $1.

You may also be able to claim GST credits for business expenses like:

• Fuel
• Tolls and parking
• Vehicle Registration and insurance

As with normal expense claims for your tax return, you can only claim the portion you used for business purposes.

GST credits and the total amount of GST you owe are claimed and calculated when you lodge your Business Activity Statement (BAS).

Business activity statements (BAS)

Any business registered for GST must lodge a quarterly BAS. This helps you as a self-employed individual to report and pay your taxes, including your GST obligations.

For individuals and businesses who turnover less than $20 million GST annually, you need to lodge your BAS quarterly.

Your BAS is either lodged online via MyGov or by your accountant.

You can also make your pay-as-you-go (PAYG) tax instalments via your activity statement. This means you’ll pay tax quarterly rather than in a lump sum at the end of the financial year.

BAS requirements can be confusing, so it’s always a good idea to consult with a registered tax agent for help.

Record keeping

First and foremost, as a rideshare driver, you should keep a logbook for all your rideshare trips to claim all business-related vehicle expenses.

All the rideshare providers will have a section within your driver account where you can access your tax summary. These are usually accessible in both a monthly and an annual statement, meaning that you can easily see what you’ve earned, how much GST needs to be paid, and how much the platform has taken in fees, all in one document.

You should also keep copies of your receipts for all business-related expenses, which should be justified by the records in your logbook.